MBANow: MBA Chief Economist on Loan Production Cost Increases

The Mortgage Bankers Association uploaded its latest MBANow video on YouTube.   

In this video, MBA Chief Economist Mike Fratantoni discusses his recently published piece in The Journal of Structured Finance (http://www.iijournals.com/toc/jsf/current) outlining data that show how loan production and origination costs increased over the past several years.  

“The takeaway is–and every lender in the industry knows–that origination costs have really gone through the roof over the past several years,” Fratantoni said, noting that loan production costs have gone up by more than $1,700 per loan between 2012 and 2015.  

Fratantoni added that new regulations, such as the Qualified Mortgage rule and theTILA/RESPA Integrated Disclosure rule, along with hiring of new QC and quality assurance staff to ensure compliance have added to loan production costs.  

To view the video, click https://www.youtube.com/watch?v=KzwYjKS4wmM&feature=em-uploademail.  

For a limited time, Fratantoni’s article, Mortgage Lender Profitability and Its Impact on Market Spreads, is available to read at no cost, courtesy of the Journal of Structured Finance. You can access the link until July 15 at http://www.iijournals.com/stoken/Special_Access/JSFSp16_Fratantoni/full?redirectUri=/doi/full/10.3905/jsf.2016.22.1.069.