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Lender Production Profits Down 60% Thanks to TRID
Thursday, March 17, 2016
The new Truth-in-Lending disclosure (TRID) rule is being blamed for a sharp decline in the per loan profitability of mortgage lenders. The Mortgage Bankers Association said that its fourth quarter survey of independent mortgage banks and mortgage subsidiaries of chartered banks found a drop in profitability from $1,238 per loan in the third quarter of 2015 to $493 in the fourth. TRID, the so-called "Know Before You Owe" rule went into effect for loans for which applications were received on or after October 3, 2015.
"Production profits dropped by over sixty percent in the fourth quarter of 2015 compared to the third quarter," said Marina Walsh, MBA's Vice President of Industry Analysis. "With the Know Before You Owe (TRID) rule going into effect last October 3rd and declining production volume compared to the third quarter of 2015, mortgage bankers saw their total loan production expenses climb to $7,747 per loan, from $7,080 per loan in the third quarter."
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