As Origination Costs Rise What Can Lenders Do to Increase Profits

Boston – May 6, 2014 –To survive current mortgage business conditions, banks and credit unions must find ways to cut paperwork, reduce compliance risk, increase productivity and make the loan officer’s job easier so there is more time allocated to closing loans. As origination costs rise, what can lenders do to increase profits?Profits for Mortgage Lenders

Recent reports show the cost of origination has risen sharply over the past year while loan officer productivity has dropped.  According to the MBA, loan expenses in 2014 can average nearly $6,900 per loan.  Meanwhile, red tape and compliance have reduced productivity to 2.0 loans per month per production employee.  And with new demands from the Consumer Finance Protection Bureau (CFPB), the allocation of time is only going to increase.  All of this has dropped the profit margin on loans by more than 90% in about a year. After commissions, compensation, occupancy, equipment, production expenses and corporate allocations, the profit per loan is estimated today at $150 per loan.

What can lenders do?

Banks that use technology to automate the point of sale can reduce the amount of time it takes to pre-qualify a mortgage applicant.  Automation can provide loan officers with pre-filtered, pre-qualified applications from the Internet.  Instead of spending hours with an application, a loan officer can determine within minutes what the next step is for an application.  A qualified applicant will be followed up with immediately by a loan officer, thus greatly increasing the likelihood the loan will close.

LendersLogic Consumer Direct with Instant Online Approval provides online mortgage point-of-sale technology to banks and credit unions to automate mortgage application pre- approvals.  LendersLogic provides pre-filtered, pre-qualified leads to the web sales channel.  Offered as a SaaS solution,  getting started with a private labeled LendersLogic solution is as easy as adding a new “Apply Now” button to your existing web site.  There is no IT department involvement.

LendersLogic Mortgage Application Software increases profitsFor the borrower, LendersLogic provides a superior online experience. The LendersLogic smart mortgage application guides users in a wizard-like questioning methodology. The application self-adjusts to the borrower based on the way questions are answered.  The applicants are empowered by being able to shop rates and costs. The applicant can complete mortgage applications and get conditional approval — with electronic disclosures — in as little as 10 minutes.


The LendersLogic solution:

  • Provide borrowers with a superior online experience
  • Solve the problem of abandoned online applications
  • Increases loan volume on the Internet channel
  • Standout among competitors on the Internet with Instant Online Pre-Approval
  • Reduce the time for pre-qualification from four loan-officer hours to 10 minutes
  • Close more loans with fewer loan officers
  • Easily export data from the web to all popular Loan Origination Systems
  • Stop worrying about compliance and security for your mortgage application
  • SOC 2 Audited N+1 hosting facility takes the worry out of consumer data protection
  • Custom interface to match existing web site
  • Supports multiple loan officer sites
  • Smart Answer technology to verify borrower information


For more information:


LendersLogic, Inc.

Boston, Massachusetts










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