The loan officer engineer: The $11,898 problem

The latest data from Freddie Mac is a sobering reminder that the mortgage industry's push towards digital transformation has yet to yield significant cost savings in personnel. With 67% of origination costs attributed to personnel, it's clear that lenders still have a long way to go in streamlining their operations. The $11,898 problem, as it were, refers to the average cost of originating a mortgage loan, a figure that remains stubbornly high despite years of investment in technology.

This is a concern for the real estate and property industry, as high origination costs can limit access to credit for potential homebuyers and make it more difficult for lenders to compete in a crowded market. Furthermore, the fact that personnel costs remain so high suggests that many lenders may not be getting the most out of their technology investments, or that they may be using technology to augment rather than replace human workers. As the industry continues to evolve, lenders will need to find ways to more effectively leverage technology to reduce costs and improve efficiency.

Looking ahead, it will be interesting to see how lenders respond to these challenges and whether they can find ways to reduce personnel costs without sacrificing the quality of the origination process. One area to watch is the growing trend towards automation and artificial intelligence in mortgage lending, which could potentially help lenders streamline their operations and reduce costs. Additionally, regulators and industry leaders will likely be keeping a close eye on the impact of these costs on access to credit and the overall health of the housing market.

Originally reported by housingwire.com. ASIDNews adds analysis for real estate & property readers.