Here’s Why Your Institution Should Consider TPO in 2018

Blog post was written by Dave Stephan, Inlanta’s TPO Manager. 

If you’ve been reading Rob Chrisman’s blog (and if you haven’t, you should), he’s made mention of many lenders recently that are having layoffs, losing agency approvals and/or searching for a buyer. Competition in the purchase market is fierce and refi’s can’t be counted on for any significant volume in the foreseeable future. Liquidity in the market is continuing to dry up as shrinking margins in the mortgage industry make further investments in growth less and less attractive.

Considering that some companies built for the single purpose of making mortgage loans are struggling, what does this mean for the community bank or credit union as we enter into 2018?

Most community institutions have absorbed the increased costs of Dodd-Frank, but with the MBA reporting that the cost to originate a loan in the first quarter of 2017 hit nearly $9,000, it may be time to take a closer look at the profitability of your mortgage operation.  Assuming everyone is not just paying their Loan Officers more, nearly all the increases can be attributed to increased compliance costs.

While it can be difficult to do a true stand-alone analysis, those metrics are key to understanding how (and if) your department is contributing to the overall profitability of your institution. Pondering that, using the MBA cost figure would generate about $1,000,000 yearly in expenses given a modest production of 10 units per month and the assumption of profitability becomes less apparent.

That same level of production, if run through a Third Party Originations (TPO) channel, would produce nearly zero back office processing and compliance-related costs. Because a TPO provider provides disclosures, processes, underwrites, and draws docs, virtually all of those costs that have contributed to the shrinking bottom line are eliminated.

Add in the fact that TPO allows you to bring in FHA, VA, and USDA RD to your product mix and the decision becomes even more apparent. TPO will quickly and easily decrease costs and increase your production and profitability. Originate more and worry less in 2018 with an Inlanta TPO relationship! Need more information?  Email me at or call 262.754.6292 or visit our LinkedIn page.