A new report released this week revealed that the majority of loan originators make $100,000 or more annually.
This was one of the major takeaways from Mortgage Daily’s 2012 Loan Originator Survey, which included 175 originators (120 who completed ALL questions).
Per the survey, nearly 60% of respondents indicated that they made at least $100,000, which is about double the median household income in the United States.
Additionally, many noted that they would have made even more if it weren’t for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
However, a small share said they profited from the new requirements, perhaps because of fewer competitors in the space.
The biggest complaint from originators had to do with appraisal requirements, and the fact that many appraisals are coming in low these days (sign of the times).
Most of those surveyed do not work for banks, and more than a quarter are self-employed, meaning many could be mortgage brokers.
A study back in 2011 found that mortgage brokers generated average revenue of 2.25 mortgage points per loan, before the new compensation rules took effect, and predicted that number wouldn’t change.
On a $200,000 loan, we’re talking $4,500, less expense. So for the broker originating numerous loans monthly, you can see how it all adds up.
This figure probably used to be a lot higher during the boom, back when loan officers and brokers could get paid excessive amounts by both the lender and the borrower, not just one.
Is the Survey Skewed?
While this survey gives us a little insight into how much some originators are making these days, the number of participants is a bit limited.
Additionally, you have to wonder how many of the low-producing originators chose to take part in the questionnaire.
Those who aren’t having a banner year might not be keen on filling out a survey.
And salaries are always going to display an enormous range in the real estate business, mainly because there are those who work part-time, those who just entered the fray, and those who have been in business for decades that are well connected.
Just look at real estate agents, excuse me, Realtors, who made a median $34,100 in 2010.
The median salary for those in business for two years or less was just $8,900, while it was $47,100 for those in business 16 years or more, per NAR.
And 16% earned a six-figure income, revealing the major disparity among agents.
Fifth Third Providing Employment Solutions to Unemployed Mortgage Borrowers
Here’s a little something related, as it has to do with employment. Fifth Third Bank said it partnered with NextJob, a “nationwide reemployment solutions company,” to find jobs for its unemployed mortgage borrowers.
The program, which was piloted in 2012, targets bank customers who are at serious risk of default on their mortgages.
Of those who took part so far, 40% were fully employed after six months, making the program a novel way for both the bank and borrowers to avoid foreclosure.
NextJob helps borrowers create an effective resume and cover letter, carry out a targeted job search, and train and prepare for interviews.
Perhaps banks and lenders should consider hiring these at-risk borrowers in their own lending departments, seeing that they’re all having capacity constraints.
That could solve two problems in one, and by the sound of it, the compensation ain’t too shabby. But in all seriousness, if you’re a Fifth Third mortgage customer in need of assistance, check it out.