“For the first time since inception of MBA’s report in 2008, net production income was in the red in 2022, with losses averaging 13 basis points. The rapid rise in mortgage rates over a relatively short period of time, combined with extremely low housing inventory and affordability challenges, meant that both purchase and refinance volume plummeted. The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues, and higher costs per loan.” --Marina Walsh, CMB, MBA Vice President of Industry Analysis.

Given the downturn in mortgage volume and the exploding cost to originate, Fannie Mae’s announcement comes at a time when QC departments may be much leaner than they were the year before. However, lenders can ill afford to ignore these changes, and compliance may mean investing in automation despite declining profitability.