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Are People Leaving The Mortgage Industry?
The Bureau of Labor Statistics forecasts a 2.9% employment growth for mortgage loan originators between 2022 and 2032. During that period, it is forecasted 10,400 jobs in the mortgage industry should open up. Licensed and registered mortgage loan originators advise, authorize and recommend loan approval for individuals and businesses. According to data from the U.S. BUREAU OF LABOR STATISTICS tens of thousands of loan officers LEFT the mortgage industry in 2023 due to inflation, surging mortgage rates, and housing shortage. In October, 2023, 67% of current mortgage loan officers produced less than one unit of closed loans in October. 21% of loan officers closed 1.5 units per month and only 12% of mortgage loan orignators closed greater than 2.5 units. The mortgage industry was decimated due to the economy, high rates, and inventory shortage. Very few from the work force sought work in the mortgage lending industry. According to the Nationwide Mortgage Multistate Licensing System, in the second quarter, there were 24.5 percent fewer individual licenses awarded for mortgage lenders. That means people are leaving the mortgage industry altogether permanently. More loan officers are expected not to renew their NMLS licenses or leave the mortgage industry.
In all of 2022 and through the first half of 2023, the average mortgage lender was not profitable and lost money on every mortgage it originated. In first quarter of this year, the average loss was $1,972 per mortgage loan. In the second quarter, the size of the loss improved to $534 per loan.
Realtor.com, the real estate listing and informational website forecasts the housing market will continue to struggle in 2024 and mortgage rates will average 6.8% in 2024, and possibly drop to 6.5% by the end of 2024. This is not promising news because mortgage rates were at 2.5% just two years ago. Loan officers are expected to have a tough road ahead because consumers have not adapted to this sudden hike in rates. Until the mortgage rate of 6.5% is accepted as the new normal, the mortgage industry will continue to struggle and more loan officers and mortgage companies are expected to leave the mortgage industry. There were a total of 160,000 licensed and registered mortgage loan originators. 50,000 loan officers have exited the mortgage industry and more are expected to leave this year by the second quarter. There are 90,000 mortgage loan originators left in the mortgage industry today but that number is forecasted to drastically get reduced to as much as 40,000 so only 50,000 loan officers is forecasted to remain in business.
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11 Replies
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A lot of little mom and pop mortgage broker companies are going out of business. The press is keeping this quiet but this is no joke. The mortgage industry is in dire trouble.
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Most Americans are priced out of the housing market. With rates over 7% and home prices double the prices they were 3 years ago Most Americans cannot afford homes at these prices
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I will post the most current numbers on the number of loan officers that left the mortgage industry and mortgage companies that went out of business
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Well over 80% of the loan officers I have worked with are out of the business.
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That is a lot of people, John. 80% is the whole industry. Now what is going to happen is there is going to be a major shortage of loan officers, processors, and underwriters when the housing and mortgage markets makes a major overhaul and corrects. What is going to happen then? Most loan officers and mortgage industry workers will not come back no matter how good the mortgage industry is because they have such bad taste in their mouths. I would think of getting out of the mortgage industry too but I got so much invested that I just cannot walk away quite yet. My investment is not just capital, websites, and digital media marketing platforms but also with people who have been loyal to me. Cannot be the first person to vacate a shippng ship.
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There were a loss of 100,000 loan officers who left the mortgage industry in the past 24 months. There are a total of 41,055 Mortgage Brokers in the United States as of December 04, 2023 and the numbers is expected to decrease. These numbers need to be fact checked but seems the source is rentech digital SmartScrappers, a data lead generation service websites who sell list of mortgage brokers and contact information nationwide. Many mortgage brokers cannot survive the tough competitive mortgage industry climate with surging inflation, Bidenomics, high mortgage rates, and a very volatile housing market. The secondary mortgage markets are very volatile and unstable that many mortgage lenders do not know how to price a loan they are banking and are worried shitless over not being able to sell their funded loans and have an inventory of scratch and dent loans.
https://www.housingwire.com/videos/james-kleimann-on-8-mortgages-and-the-loss-of-100000-los/
housingwire.com
James Kleimann on 8% mortgages and the loss of 100,000 LOs - HousingWire
Today we talk about about 8% mortgage rates, the number of LOs who have left the industry, and the commission lawsuits facing NAR.
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Mortgage rates will plummet. It’s not if but when rates will plummet. When rates plummet what are we going to do with the major shortage of loan officers, processors, underwriters, and support staff? Unless we find a way to automate the mortgage loan origination process or have artificial intelligence to handle the loss of manpower, we will have another mortgage crisis coming in the weeks and months ahead. Mortgage Rates will probably never be in the 2.0% range but you can bet rates will be in the 4% range which will spark a refinance wave.
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There is a mid-sized mortgage company that is full eagle that I know many loan officers, processors, and underwriters who work or used to work there. The mortgage company grew exponetionally in size and volume over the past several years. The main owners of the company did not spare any expense on decorating the office, the lunch and dinner parties for loan officers, support and operations staff, and realtor referral networking partners. They did not hesitate to spend $10,000 several times over every other week for realtor functions, downtown parties, party buses and party boats. Last November, the owners of this mortgage company laid off or fired the top salary people which includes openers, mortgage processors, mortgage underwriters, people from the closing department and funding department, HR, and operations. They only kept the lower budget employees. The loan officer count at this Illinois mortgage lender is down to half with the office alone being $30,000 per month. This is a mortgage lender and not mortgage broker, so most loan officers are struggling with asking for pricing exceptions on every deal they close. Mortgage brokers are capped at 2.75% compensation but mortgage bankers normally have to price out mortgage loans at 5% or higher in order to be able to pay overhead. I see this mortgage lender going out of business if the market does not improve soon.
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I hope your correct. It’s been a tough couple of years and look forward to making good money again.
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Unfortunate that people are leaving the Mortgage Industry after decades in this line of work