The most in-depth public collection of mortgage origination metrics
Vova Pylypchatin
CTO @ MortgageFlow
Operational efficiency in mortgage origination is critical for lenders to stay profitable during market downturns.
However, driving operational improvements is hard without a way to objectively measure the volume, quality, and efficiency of mortgage origination operations.
At the end of the day, how can you know if you’re moving in the right direction without a baseline to compare against?
To provide mortgage operations leaders with the answer, I set out to compile the most in-depth, publicly available mortgage origination metrics library.
This library includes over 100 metrics that quantify the performance of 6 mortgage origination functions, giving operations leaders the data they need to drive operational improvements.
I tried to measure mortgage origination operations from every possible angle, but if I missed something, please drop us a line, and I’ll update the post.
Special thanks to the wonderful Jodie Bayardo from AMEX Mortgage for inspiring the creation of this library.
1. WHAT’S INSIDE AND HOW TO USE IT
Mortgage Origination Metrics Library Structure
Below is an overview of what’s inside the library and how it is structured, including:
Which operations are measured in the library
What types of metrics does the library cover
What does each metric type consist of
Initially, I planned to include the framework behind the operational metrics as an introduction to the library. However, it ended up being an over 10k-word endeavor, so I separated it into its own post.
An in-depth guide about the framework behind this operational metrics collection is coming soon.
Operations covered
This library covers metrics measuring the Mortgage Loan Origination operation and its five nested operations:
Mortgage Loan Origination
Mortgage Loan Sales
Mortgage Loan Processing
Mortgage Loan Underwriting
Mortgage Loan Closing
Mortgage Loan Post-Closing
Metrics at the top level of the Mortgage Loan Origination operation offer a higher-level view of the origination process's performance.
Meanwhile, metrics for the nested operations provide insight into the performance of each step in the mortgage loan origination chain.
Mortgage companies vary in structure and models, so some may not have all these operations. Use the metrics that apply to your organization and disregard the rest.
Operational metrics types covered
Metrics in each operation are divided into 4 groups based on the aspect of operation they measure:
📊 Operation Volume Metrics → Measure the quantity and volume of work products produced.
📋 Operation Output Quality Metrics → Measures the quality of the operation's work products.
🔄 Operation Function Efficiency Metrics → Measures how efficiently the operation transforms input into work products.
🪙 Operational Output Financial Metrics → Measures financial aspects of producing a unit of work product like cost, revenue, and profit.
Operational metrics components covered
Each metric consists of a Measure and a Dimension.
Measure quantifies the data.
Dimension breaks down the Measure to provide additional context.
For example, the metric $ Total Production Volume (per Loan Officer) consists of:
Measure:$ Total Production Volume
Dimension:(per Loan Officer)
By combining different measures and dimensions, you can derive metrics representing various operational performance aspects.
If we consider all possible combinations of measures and dimensions, there are way more than 100 mortgage origination metrics.
To keep the library digestible, each metric type covers the top 5 most impactful metrics and the Measures and Dimensions used to derive them.
You can use the same Measure x Dimension framework to derive new metrics not covered in the library.
How to Use Metrics From The Library
The library covers more than 100 mortgage origination metrics.
And it’s probably not the best idea to measure all of them.
Measuring everything will give more noise rather than actionable insights.
My approach to make the most out of the metrics measure is to:
Measure what you want to improve
The idea is to identify what operation and aspect of operation you want to improve and focus on measuring only these metrics. Once objectives change, so do the metrics you focus on.
Depending on the size of the mortgage company, several operations leaders are responsible for improving the operations they oversee.
In this case, each operation leader would focus on a set of metrics relevant to their operation, while executive leadership would use higher-level metrics that encompass the performance of all nested operations.
2. METRICS
Mortgage Origination Metrics
Function purpose: Produce mortgage loans to generate revenue through interest payments or sales on the secondary market.
Function input: Leads
Function output: Closed Loans
Function agents:
Loan Officer
Loan Processor
Loan Underwriter
Loan Closer
Loan Post-Closer
📊 Mortgage Origination Volume Metrics
Metrics in this group quantify the volume of Mortgage Loans (work product) produced by the mortgage origination function.
Since loans vary in amount, volume is primarily determined by the dollar value of the fully closed, funded, and packaged loan.
Measures:
$ Total Value of Loans Originated
Loans Originated
Dimensions:
per Loan Origination Date (Time dimension)
per Loan Officer (Agent dimension)
per Loan Processor (Agent dimension)
per Loan Underwriter (Agent dimension)
per Loan Closer (Agent dimension)
per Loan Post-Closer (Agent dimension)
per Branch (Agent dimension)
per Loan Purpose (Output dimension)
per Loan Product (Output dimension)
per Lead Source (Output dimension)
per FICO Score Bucket (Output dimension)
Metrics:
$ Total Value of Loans Originated (per Loan Officer)
$ Total Value of Loans Originated (per Loan Product)
Loans Originated (per Loan Processor)
$ Total Value of Loans Originated (per FICO Score Bucket)
$ Total Value of Loans Originated (per Lead Sources)
📋 Mortgage Origination Output Quality Metrics
Metrics in this group quantify the quality of the Mortgage Loans produced by the mortgage origination function.
Since a loan is an asset, its quality is primarily determined by projected financial performance, default or compliance liabilities risk, and the asset's attractiveness on the secondary market.
Measures:
$ Avg Loan Value
Avg Loan Interest Rate
Avg Loan Borrower FICO Score
% Avg Loan LTV Ratio
% Avg Loan Borrower DTI Ratio
% Loan Default Rate
% Loan Buy Back Rate
% Loan Compliance Rate
Dimensions:
per Loan Origination Date (Time dimension)
per Loan Officer (Agent dimension)
per Branch (Agent dimension)
per Loan Purpose (Output dimension)
per Loan Product (Output dimension)
per Lead Source (Output dimension)
per FICO Score Bucket (Output dimension)
Metrics:
$ Avg Loan Value (per Loan Officer)
% Avg Loan LTV Ratio (per Loan Officer)
% Loan Default Rate (per Loan Purpose)
Avg Loan Borrower FICO Score (per Lead Source)
% Loan Compliance Rate (per Loan Product)
🔄 Mortgage Origination Function Efficiency Metrics
Metrics in this group quantify the efficiency of the mortgage origination function in transforming Leads into Closed Loans.
The efficiency of the mortgage origination function is primarily determined by the time it takes to originate a loan, the ratio of mortgage origination operations that result in a loan, and the customer experience throughout the process.
Function purpose: Generate complete Loan Applications
Function input: Leads
Function output: Complete ****Loan Application
Function agent: Loan Officer
📊 Mortgage Sales Volume Metrics
Metrics in this group quantify the amount of qualified loan applications produced by the mortgage sales function.
Since loans vary in amount, volume is primarily determined by the dollar value of the complete loan application that is ready for processing.
Measures:
$ Value of Loan Applications Taken
Loan Applications Taken
Dimensions:
per Completed Loan Application Date (Time dimension)
per Loan Officer (Agent dimension)
per Lead Source (Input dimension)
per Loan Purpose (Output dimension)
per Loan Product (Output dimension)
per FICO Score Bucket (Output dimension)
Metrics:
Loan Applications Taken (per Loan Officer)
$ Value of Loan Applications Taken (per Lead Source)
$ Value of Loan Applications Taken (per Loan Product)
Loan Applications Taken (per Loan Purpose)
$ Value of Loan Applications Taken (per FICO Score Bucket)
📋 Mortgage Sales Output Quality Metrics
Metrics in this group quantify the quality of the Loan Applications produced by the mortgage sales function.
Loan Applications serve as an input for subsequent operations in mortgage origination. Thus, their quality is primarily determined by how effectively they result in a closed loan and the quality of the loan that results from the application.
Measures:
% Application to Approval Rate
% Loan Application Pull-Through Rate
$ AVG Loan Application Value
AVG FICO Credit Score
% AVG LTV Ration
% AVG DTI Ration
Dimensions:
per Completed Loan Application Date (Time dimension)
per Loan Officer (Agent dimension)
per Lead Source (Input dimension)
per Loan Purpose (Output dimension)
per Loan Product (Output dimension)
Metrics:
% Application to Approval Rate (per Loan Officer)
% Loan Application Pull-Through Rate (per Lead Source)
$ AVG Loan Application Value (per Loan Product)
AVG FICO Credit Score (per Lead Source)
% AVG LTV Ration (per Loan Officer)
🔄 Mortgage Sales Function Efficiency Metrics
Metrics in this group quantify the mortgage sales function's efficiency in transforming Leads into Loan Applications.
The efficiency of the mortgage sales function is primarily determined by the time it takes to convert a lead into a Loan Application and the drop-off rate in the process.
Measures:
Mortgage Loan Sales Cycle Time
% Mortgage Loan Lead to Application Conversion Rate
Dimensions:
per Completed Loan Application Date (Time dimension)
per Loan Officer (Agent dimension)
per Lead Source (Input dimension)
per Loan Purpose (Output dimension)
per Loan Product (Output dimension)
Metrics:
Mortgage Loan Sales Cycle Time (per Loan Officer)
% Mortgage Loan Lead to Application Conversion Rate (per Loan Officer)
Mortgage Loan Sales Cycle Time (per Loan Product)
% Mortgage Loan Lead to Application Conversion Rate (per Lead Source)
Mortgage Loan Sales Cycle Time (per Lead Source)
🪙 Mortgage Sales Output Financial Metrics
Metrics in this group quantify the financial cost of individual Loan Applications produced by the mortgage sales function.
A Loan Application costs are determined by the labor and vendor costs required to produce it.
Measures:
$ Mortgage Loan Application Cost
Dimensions:
per Completed Loan Application Date (Time dimension)
Function purpose: Prepare the Loan Application Package with all the documentation required for Underwriting to approve or deny a Loan Application.
Function input: Loan Application
Function output: Loan Application Package
Function agent: Loan Processor
📊 Loan Processing Volume Metrics
Metrics in this group quantify the volume of Loan Application Packages produced by the mortgage loan processing function.
Since the work required to produce a Loan Application Package does not depend on the Loan Value, volume is determined by the number of Loan Applications processed and submitted for underwriting.
Metrics in this group quantify the quality of the Loan Application Packages produced by the mortgage loan processing function.
Since the Loan Application Package is utilized by the Underwriting function, its quality is determined by the impact on the efficiency of the underwriting function and on underwriting decisions.
Metrics in this group quantify the efficiency of the mortgage loan processing function in processing Loan Applications.
The efficiency of the mortgage loan processing function is primarily determined by the time it takes to process a Loan Application, the number of processing operations that result in a complete loan application, and the borrower's experience throughout the process.
Measures:
Mortgage Loan Processing Cycle Time
% Mortgage Loan Processing Conversion Rate
% Mortgage Loan Processing Withdrawal Rate
Borrower Touch Points To Process Loan
Dimensions:
per Loan Package Submission Date (Time dimension)
per Loan Processor (Agent dimension)
per Loan Purpose (Input dimension)
per Loan Product (Input dimension)
Metrics:
Mortgage Loan Processing Cycle Time (per Loan Processor)
AVG Post Closing Risk Rating Gap (per Loan Underwriter)
🔄 Loan Underwriting Function Efficiency Metrics
Metrics in this group quantify the efficiency of the mortgage underwriting function in producing Underwriting Decisions.
The efficiency of the underwriting function is primarily determined by the time it takes to make a decision and the percentage of loan applications received for underwriting that result in a decision.
Measures:
Mortgage Loan Decision Cycle Time
% Underwriting Withdrawal Rate
% Underwriting Completion Rate
Dimensions:
per Decision Date (Time dimension)
per Underwriter (Agent dimension)
per Loan Product (Input dimension)
per Loan Purpose (Input dimension)
per Decision Outcome (Output dimension)
Metrics:
Mortgage Loan Decision Cycle Time (per Underwriter)
Mortgage Loan Decision Cycle Time (per Loan Product)
Mortgage Loan Decision Cycle Time (per Decision Outcome)
% Underwriting Completion Rate (per Underwriter)
% Underwriting Withdrawal Rate (per Underwriter)
🪙 Loan Underwriting Output Financial Metrics
Metrics in this group measure the cost of Underwriting Decisions produced by the loan underwriting function.
The cost of an Underwriting Decision is determined by the labor and vendor costs required to produce it.
Measures:
$ Loan Underwriting Decision Cost
Dimensions:
per Decision Date (Time dimension)
per Underwriter (Agent dimension)
Metrics:
$ Loan Underwriting Cost per Decision (per Underwriter)
$ Loan Underwriting Cost per Decision (per Decision Date)
Mortgage Loan Closing Metrics
Function purpose: Turn an approved Loan Application into a finalized loan agreement, disburse funds, and transfer property ownership.
Function input: Approved Loan Application
Function output: Closed Loan
Function agent: Loan Closer
📊 Loan Closing Volume Metrics
Metrics in this group measure the volume of Closed Loans (work product) produced by the mortgage closing function.
The volume of Closed Loans is determined by the total count of fully funded loans.
Measures:
Loans Closed
Dimensions:
per Loan Application Received Date (Time dimension)
per Loan Closed Date (Time dimension)
per Loan Closer (Agent dimension)
per Loan Product (Input dimension)
Metrics:
Loans Closed (per Loan Closer)
Loans Closed (per Loan Closed Data)
% Loans Closed (per Loan Product)
% Loan Applications Received for Closing (per Loan Product)
Loan Applications Received for Closing (per Loan Application Received Date)
📋 Loan Closing Output Quality Metrics
Metrics in this group quantify the quality of Loan Closings produced by the mortgage closing function.
The quality of a Loan Closing is primarily determined by the accuracy of funding and loan documentation.
Metrics in this group quantify the efficiency of the loan closing function in closing loans.
The efficiency of the loan closing function is primarily determined by the time it takes to close a loan and the percentage of approved loans that result in a closed loan.
Measures:
Mortgage Loan Closing Cycle Time
% Mortgage Loan Closing Withdrawal Rate
Dimensions:
per Loan Closed Date (Time dimension)
per Loan Closer (Agent dimension)
per Loan Product (Input dimension)
Metrics:
Mortgage Loan Closing Cycle Time (per Loan Closer)
Mortgage Loan Closing Cycle Time (per Loan Closed Date)
🪙 Loan Closing Output Financial Metrics
Metrics in this group measure the cost of producing a Loan Closing by the loan closing function.
The cost of a Loan Closing is determined by the labor and vendor costs required to produce it.
Measures:
$ Loan Closing Cost
Dimensions:
per Loan Closed Date (Time dimension)
per Loan Closer (Agent dimension)
Metrics:
$ Loan Closing Cost (per Loan Closer)
$ Loan Closing Cost (per Loan Closed Date)
Mortgage Loan Post-Closing Metrics
Function purpose: Ensure completeness and compliance of the closed loan package so the loan is ready for servicing or transferring to a secondary market investor.
Function input: Closed Loan
Function output: Closed Loan Package
Function agent: Loan Post-Closer
📊 Loan Post-Closing Volume Metrics
Metrics in this group measure the volume of Closed Loan Packages produced by the mortgage closing function.
The volume of Closed Loan Packages is determined by the total count of Closed Loans that have been packaged and are ready for servicing or transfer to a secondary market investor.
I’m a software consultant with background in software engineering. Currently, I run a mortgage software consulting and development company that builds custom tools and automation solutions for mortgage lenders.
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