Tom Lamalfa: October 2021 MBA Annual Convention & Expo Survey

(Tom Lamalfa is a 44-year veteran of mortgage market research, whose focus in recent years has been on federal housing policy. He is president of TSL Consulting, Cleveland Heights, Ohio. His semi-annual reports on the housing and mortgage finance industries appear regularly in MBA NewsLink. He can be reached at

  1. What was your firm’s total production volume in all channels last year? $38.4b mean/$15b median
  2. In how many production channels does your firm operate? 1.9/2
  3. Does your firm operate nationally, regionally or statewide? 25/5 /3
  4. How many people does your mortgage company employ? 3.6k/1.4k
  5. What percent of this year’s production is purchase business? 54.3/50%
  6. What percent of this year’s production is conventional GSE business? 65.4/65%
  7. What percent is FHA- insured business this year? 10.2/7%
  8. Combined, what percent is VA and USDA insured this year? 10.7/9%
  9. What percent is non-agency jumbo this year? 12.8/9%
  10. Finally, what percent of your volume is non-QM or non-prime this year? 1.5/0%
  11. Do you expect an increase in FHA lending next year? Y-22/ N-11
  12. Do you expect an increase in MI-insured lending next year? Y-26/ N-8
  13. By how much has refinance volume contracted at your firm this year? 17.6/15%
  14. Have you expanded your firm’s sales force this year? Y-27 N-6
  15. Outside of sales, is expansion or contraction of staff expected next year? E-11/C-13/NC-10
  16. Do technology and automation better allow staff to be re-purposed in-house? Y-26/N-4
  17. What letter grade would you give FNMA for its interaction with your firm in 2021? 4/19/10
  18. What letter grade would you give FHLMC for its interaction with your firm in 2021? 4/20/10
  19. What letter grade would you give GNMA for its interaction with your firm in 2021? 3/10/10
  20. What letter grade would you give HUD and Sec’y Fudge for performance to date? 15/9/1
  21. What letter grade would you give the federal gov’t’s effort to end the pandemic? 2/14/14
  22. What letter grade would you give the Biden Admin. for its first 9 months in office? 0/15/5/10
  23. Who is providing better all-around service this year, Fannie or Freddie? Fa-16/ Fr-14
  24. A recent FNMA survey shows few consumers go digital for a mortgage. Agree? Y-31/N-3
  25. Scaled 1-10, how large a problem is agency buyback demands these days? 2.9/2
  26. Scaled 1-10, how bullish are you on the outlook for the residential market in 2022? 6.1/6.5
  27. YOY, how much do you expect aggregate origination volume to decline this year? 16.3/15%
  28. YOY in bps, by how much are conv’l conf’g margins down industry-wide? 71.3/67.5bp
  29. Do you expect margin pressure to worsen next year? Y-33/ N-1
  30. Are you expecting a significant increase in inflation next year, to over 5%? Y-12/ N-22
  31. Would linking conf’g loan limits to income instead of HPA be a good idea? Y-7/ N-27
  32. Approximately what was your firm’s servicing recapture rate the past 2 years? 36.4/35%
  33. Will HPA continue at a double-digit pace in 2022? Y-5/ N-29
  34. Do you expect a wave of foreclosures with the moratorium now lifted? Y-7/ N-27
  35. Expect the number of homes for sale to increase substantially next year? Y-12/ N-22
  36. Have your firm’s expenses increased, decreased or held flat this year? I-14/ D-6/ F-14
  37. Has your firm been hit with a ransomware attack? Y-0/ N-33
  38. Are Ginnie Mae prices deteriorating? Y-12/ N-13
  39. Has the absence of an FHA commissioner hurt the agency? Y-15/ N-17
  40. Have processing delays been a big problem at FHA this year? Y-9/ N-22
  41. What percent of your firm’s employees are currently in the office full time? 21.9%/10%
  42. Are the other employees in the office more than 2 days/week or less than 3? M-5/ L-28
  43. Permanent WFH accounts for what percentage of your firm’s workforce? 42.6/40%
  44. Do you expect this percentage to change much in the next year? Y-7/ N-27
  45. How challenging will it be to get employees back to the office? (1-10) 6.8 / 7
  46. Is management getting push back from employees about returning? Y-23/ N-11
  47. Will a tough stance against employees working remotely accelerate churn? Y-30/ N-4
  48. Is the push back coming from your firm’s youngest, newest employees? Y-5/ N-29
  49. Is remote work adversely affecting customer service? Y-5/ N-29
  50. Does reduced commuting time account for the bulk of productivity gains? Y-27/ N-7
  51. Are corporate culture, cohesion & collegiality at risk from WFH? Y-31/ N-3
  52. What percentage of your employees do you expect at their desks in January? 36.5/30%
  53. What percent of sr mgnt currently works from home 2 or more days/week? 59.7/80%
  54. Has Covid’s resurgence postponed your firm’s reopening to its employees? Y-27/ N-7
  55. Will your firm require employees to be vaccinated in order to return to work? Y-7/ N-21
  56. Is testing an option for the unvaccinated at your firm? Y-11/ N-13
  57. Scaled 1-10, how confident are you in the value of FICO scores? 7.4/8
  58. Is FICO’s influence waning in the mortgage sector? Y-14/ N-20
  59. Are you using less office space today than 2 years ago? Y-25/ N-9
  60. Will your firm occupy even less office space in 2022 and beyond? Y-23/ N-11
  61. Should IMBs be required to comply with CRA? Y-11/ N-23
  62. Do you expect that IMBs will see a further share shift to them this year? Y-20/ N-14
  63. Scaled 1-10, how much have inclusiveness & diversity advanced at your firm of late? 7.2/7
  64. Is climate change starting to affect pricing in disaster-prone housing markets? Y-6/ N-28
  65. Will climate be a key factor in risk assessment in the years ahead? Y-28/ N-6
  66. Should industry-wide standardization be established on the non-agency side? Y-13/ N-21
  67. Will you be attending the MBA’s Annual Convention this month? Y-13 / N-21
Tom Lamalfa

October 2021 Report of Survey Findings
In early October I surveyed 34 senior executives from 34 separate mortgage companies about an array of issues and topics both relevant and consequential to the mortgage banking industry. It was the 26th time since 2008 that this survey has been conducted and published by the MBA. The surveys are completed twice a year in conjunction with the Secondary Market Conference every May and the Annual Convention each October. Until the pandemic began in early 2020, the surveys were conducted face to face at the respective events. Since, the surveys have been taken on the

The purpose of the research is to ascertain, as best possible, the thinking, attitudes and expectations of a select sample of industry executives assembled to represent a microcosm of the lender members of the MBA. The sample was drawn based on type of lender, industry share distribution, the firm’s origination volume, the number of production
channels the firm operates, and markets served.

Before delving into the survey findings, a brief comment about those surveyed. Most are executives I’ve met over my decades doing research in residential finance. So, there is nothing random about the survey sample. The majority surveyed have been part of the survey group since the start a dozen years ago. This time around only one new executive
was added to the group from May. The firm was added to adjust for the share shift from banks to IMBs the past year.
Following a review of the compiled responses to 67 questions, a more detailed examination of the survey methodology, history, questionnaire, participants, and the industry model created serves to validate the information gathered.

It is recommended that readers use the Scorecard as a guide to the narrative portion since questions are often grouped to minimize words.

Q1 asked the executives about their firm’s total production volume in all channels in 2021. The in all cases un-weighted by volume group mean was $38.4 b and the median was $15 b. The range among participants was from $165 m to $203 b. Q2 asked about the number of production channels the firm operated in. The median was 2, with 13 only in retail, 12 in all three channels, and the 9 others operating in retail and correspondent and/or broker wholesale. Is your firm a national, regional or statewide lender, asks Q3. Of those surveyed, 25 operated nationwide while 5 were regional in their scope and 3 operated in a single state or 2. Wanting further information on the size of those surveyed, Q4 asked for
the number of employees at each firm. The mean size firm employed 3,600 with a mean of 1,400. The smallest firm, a CA-based mortgage brokerage employed 7, the largest, a huge bank, 25,000.

Q5-10 addressed what each lender was producing this year, specifically the percent of business that was: purchase, agency conventional, FHA-insured, VA/USDA (combined), non-agency jumbo and non-QM/non-prime. The mean and median findings were: 54.3/50% purchase, 65.4/65% GSE conventional, 10.2/7% FHA-insured, 10.7/9% VA/USDA, 12.8/9% non-agency jumbo, and 1.5/0% non-QM/prime. The ranges were 20-99.5 % purchase, 19-90% agency conventional, 0-29% FHA-insured, 0-52% VA/USDA, 0-67% non-agency jumbo, and 0-3.5% non-QM/non-prime.

Q11-12 asked about the executives’ expectations for FHA lending and MI-insured lending in 2022. Of 33 responses, 22 expect more FHA lending next year vs. 11 executives who don’t, and 26 of 34 lenders report they expect to do more MI-insured business next year.

Q13 asked by how much their firm’s refi volume shrank this year compared to last year. The mean was a 17.6% contraction, with a median of 15%. The range was from 0 to 50%. Q14-15 asked about employment, namely sales force expansion this year and non-sales employment expectations for 2022. More than 4 times more responded that their firm expanded its sales force this year; meanwhile, 13 firms expect to contract non-sales employment next year, 11 expect to expand non-sales staffing, and 10 others expect no change.

Q16, a submitted question, asked if technology and automation better allowed staff to grow–“be repurposed” — in-house. More than 6 times more indicated that technology helped employees grow and accept new positions and responsibilities within their respective firm.

Q17-22 asked for letter grades (A to F, with +s and –s) for various agencies and entities. Fannie Mae received 4 As, 19 Bs, and 10 Cs; Freddie Mac received 4 As, 20 Bs, and 10 Cs; Ginnie Mae received 3 As, 10 Bs, and 10 Cs; HUD received 15 As, 9 Bs, and 1 C; the federal government’s effort to end the pandemic received 2 As, 14 Bs, and 14 Cs; and finally, the Biden Administration received 15 Bs, 5 Cs, and 10 Ds for its first 9 months in office.

Q23 asked the executives to pick the one GSE they thought provided their firm with better all-around service this year. Once again it was a virtual tie with Fannie receiving 16 votes and Freddie 14. Q24 asked if the executives’ own observations affirmed a recent Fannie Mae survey finding that few consumers go fully digital for a mortgage loan. All
but 3 of 34 agreed with the survey finding.

Q25-26 asked those surveyed to state their responses to 2 questions using a 1-10 (low to high) scale. The questions were about 1) recent agency buyback demand and 2) the outlook for the residential market next year. Buyback requests from the GSEs ranked 2.9/2, with a range of 1 to 9, and expectations for the residential market scored a 6.1/6.5,
with a range of 2 to 8.

Q27-29 inquired into the executives’ thoughts about how much origination volume will decline this year from last, how much they thought conventional margins had (on average) dropped this year from last, and if they expect margin pressure to worsen next year. The mean and median expectations are for a decline of 16.3/15% this year from 2020, a 71.3/67.5 bp drop in average margins year-over-year, and a vote of 33 to 1 forecasting more margin pressure next year. The range of the decline in margins was from 20-200 bp. (Wholesale margins were reported to have dropped twice those of retail, about 100 bp vs. 50)

Q30-35 dealt with inflation expectations, the idea of linking conforming loan limits to income rather than HPA, servicing recapture rates, and expectations for house prices in Inflation is not expected to exceed 5% next year, reported 22 executives compared to 12 others who think 5%+ inflation is possible, even likely. Linking agency loan limits to income rather than HPA got thumbs down from 27 of 34 respondents. As for servicing recapture, the findings were that only 36.4/35% of retained servicing was not refinanced away from the lender servicer owning/holding the loans. As for expectations about house prices, only 5 of 34 executives expect HPA to again measure a double-digit advance in 2022.

Q34-36 asked if a wave of foreclosure was anticipated now that the moratorium was lifted, whether a substantial increase in the number of homes listed for sale would occur next year, and if their firm’s expenses had increased, decreased or remained flat in 2021. The responses were for no wave of foreclosures – 7:28; for no “substantial” increase in sales inventory – 12 to 22; and 28 of 34 of those surveyed indicated either flat or increased expenses this year.

Q37 asked if their firm had (ever) been hit by a ransomware attack. Although several said they couldn’t likely say if they had, all 33 responding said their firms hadn’t gotten as far as a true ransom demand, but many said it wasn’t for a lack of hackers trying to break into their systems.

Q38-40 addressed price deterioration in Ginnie Mae securities (relative to UMBS), whether the absence of an FHA commissioner was seen as hurting the agency, and if processing delays were a significant problem at FHA this year. The question of Ginnie Mae price deterioration drew nearly matched responses, with 12 noting some deterioration and 13 others not seeing it. Regarding the absence of an FHA commissioner, another mixed response with 15 respondents indicating that a commissioner was missed, while 17 others thought not. As for FHA processing delays, 22 of 31 executives didn’t view processing delays as a big problem this year.

Q41-56 addressed how firms were responding to the Covid pandemic in terms of office operations and staffing. More specifically, Q41 asked what percent of their firm’s employees were in the office full time. The mean was 21.9% and the median 10%. What about the others, are they in the office more than 2 days a week or less than 3, asked Q42? Here 29 of 33 executives indicated the balance of employees were in the office less than 3 days a week. What percent of your firm’s workforce are permanent work from home (WFH) employees, asked Q43? The mean percent of WFHs was 42.6%, with the median 40%. The range was from 5 to 95%. Q44 wondered if this percentage of WFH was expected to change much next year. Not really, said 27 of those responding, compared to 7 who expect that to change next year. Q45 asked how challenging it is to get employees back to the office. The response was 6.8/7, mean and median, on a 10-point scale, implying some difficulty, and the mean and median responses were 6.8 and 7 respectively.

Q46 asked about employee pushback. Nearly twice as many executives said their firms were getting pushback from employees about returning to the office. Q47 asked the executives if a hard line against remote work would exacerbate
employee churn. By a wide margin those surveyed felt such a stance would cause employees to look elsewhere for employment: 31 to 4. Q48 asked if the pushback was coming from the newest and youngest employees, or whether it was broad-based resistance. Broad based it is, reported 29 of 34 responding.

Q49 and 50 asked respectively about any adverse effect on customer service from remote work and if reduced commuting time was primarily responsible for the productivity gains being reported by lenders. Yes, said 27 executives vs. 7 who thought other factors (such as technology) accounted for the bulk of improvement in productivity. Q51 asked if remote work risked a diminishment of corporate culture, corporate cohesion and general collegiality at a firm. Nearly 10 times as many felt these aspects of business togetherness were jeopardized by the WFH movement.

Q52 and 53 asked those surveyed what percent of their firm’s employees would be back at their desks in the office in January 2022, and what percent of senior executives currently worked from home 2 or more days per week. The finding for a January return to the office was about one-third, specifically a 36.5% mean and a 30% median. As for senior managers currently working mostly from home, 59.7% was the mean with a median of 80%.

Q54-56 dealt with whether Covid’s resurgence had postponed what was originally expected to be the date when employees were to return to their respective offices, if vaccinations were required to return to work, and if testing was an option for those unvaccinated. The responses were: 27 of 34 indicated a reopening postponement; 9 of 28 firms required return-to-work vaccinations; and about half of the respondents offered testing as an option in lieu of vaccinations. (Many of these decisions are subject to change if conditions change. Lenders talk of “hybrid” operations and how federal mandates may affect existing decisions.)

Q57-58 focused on FICO, more specifically how confident the executives were about the value and reliability of FICO scores, and if FICOs influence was waning in the mortgage sector. FICO received a mean score of 7.4 and a median of 8, both out of 10, and a solid majority reported that FICO’s influence and importance in mortgage banking were not declining.

Q59-60 asked about the executive’s firm’s office space needs and more specifically if they were using less space than 2 years ago, and if they expected their spatial needs to diminish ahead. Far more than twice as many firms occupy less space today than pre2020, 25:9; and twice as many firms expect their need for office space to decrease prospectively: 23:11.

Q61-62 involved IMBs and if 1) they should be required to comply with the CRA, and 2) they are expected to gain more share this year (after a large share gain last year). About twice as many executives think that IMBs needn’t comply with CRA than do. And, 20 of 34 of those surveyed expect a further gain in market share by IMBs.

Q63 asked executives to scale the improvement in inclusivity and diversity at their firms in recent years. The mean was 7.2 of 10, with a median of 7. The response range was from 3-10.

Q64-65 dealt with climate change, namely if it was beginning to have an effect on pricing (mortgages) in disaster-prone housing markets, and if climate will be a key factor in risk assessment ahead. No effect (yet) on pricing said 29 of 34 executives. However, the same 29 view climate as a key factor in risk assessment prospectively.

Q66 asked if those surveyed preferred greater industry-wide standardization for the non-agency market. No, said 21 executives compared to 13 who favor greater standardization. Q67, the final question, asked if those surveyed would be attending the MBA’s Annual Convention this month. Yes, we’re attending, responded 13 of 34.

So, there you have it, how 34 mortgage banking executives responded to 67 questions about relevant industry issues and topics.

Survey Details
This survey began 12 years ago at the urging of Phil Bracken, then an EVP at Wells Fargo Mortgage. As a longstanding client of our firm’s research into the benchmarking of production revenue and expenses by production channel, and the periodic examination of third-party originators, namely correspondents and mortgage brokers, Phil had over the years received many informal surveys and notes from my meetings with him and other Wholesale Access clients at MBA events. Finding the surveys and notes useful, he suggested formalizing the surveying and publishing the findings. Wells funded the project the first several years. Since, an array of different firms has sponsored this survey, MGIC
being the most recent.

What follows is a brief overview of the survey’s purpose, participants, methodology, questionnaire, and industry model.

The objective of the research is to gather the thinking, responses and expectations of an industry through a relatively small sample size. The survey universe is the MBA’s lender members who are carefully assembled to create a microcosm of the mortgage banking industry. The participants are all veteran mortgage bankers with broad knowledge of the business. Those surveyed for the October survey included 13 CEOs and/or presidents of firms, 7 EVPs, 11 SVPs and 3 VPs.

Among the 34 firms surveyed were 17 banks and 17 IMBs. The depositories included 2 thrifts, a savings bank, a credit union and 13 commercial banks. The IMBs represent a cross-section of ownership forms, including a realtor-owned firm, 2 homebuilder-owned firms, 2 firms owned by hedge funds, 2 owned by private equity firms, and several family-or publicly-owned mortgage companies. So, type of firm, origination volume, operating channels, scope of operations, and place of domicile are the key criteria in my “stratified model” of the mortgage banking community.

The surveys, once conducted face to face, are for the time being completed over the phone. (Hopefully, we will in part revert back to the original method in May 2022.) Appointments are set up a week or two before the survey call. Survey questions are read to those surveyed, answered, and then it’s on to the next question. Surveys require about 40 minutes on average. Most questions seek a yes or no response, a scaled ranking, or a letter grade. After all the surveys are conducted, a spreadsheet is prepared and a Report of Survey Findings is drafted, distributed, and then published by MBA in NewsLink.

The surveyed firms in October include 7 firms that produced over $100 b last year, 15 (cumulative) over $25 b, 21 over $10 b, 28 over $2 b and 6 others under $2 b. Three of the 5 largest mortgage originators of agency loans in 2020–as sourced by the AEI Housing Center’s National Mortgage Risk Index—are in the survey as are 5 of the Top 10, 9 of the Top 20, 11 of the Top 25, and 19 of the Top 75. (The Top 10 firms generally account for about 50%+/- of total annual production volume and the Top 50 account for around 75-80% of the aggregate annually.)

Of a total volume of $1.405 t of production by the 34 surveyed firms, 39% or $544 b was originated by banks and the remaining 61% or $859 b by IMBs. This is almost the exact share distribution between the 2 types of lenders. The questionnaire consists of queries accumulated between the Secondary Conference and the Annual Convention, a six-month period. In addition, questions are solicited from and contributed by several MBA members, MBA staff and other industry observers.

In conclusion, please note that this report is a simple straight forward reiteration of the findings, not an analysis. That–an analysis of my major takeaways from this survey–will be posted next week at MGIC Connects, its blog.

My thanks to each of the executives who participated in this survey, and to my sponsor, MGIC, who underwrote it this year.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at; or Michael Tucker, editorial manager, at