How the Program Works »

Current Peer Groupings »

Timeframe for Fall 2008 Cycle »

2008 Participating Companies »

Data Outputs »

Frequently Asked Questions»

• How do you ensure that the benchmarking data is accurate and can be used for meaningful comparisons between firms?

• We believe we are a high-performing mortgage banker. How would we benefit from the Peer Group program?

• Our business model is different from most other companies. Therefore, what good would it do to compare with “peers”?

• How much time is required to compile the Peer Group data?

• How can I justify the cost of the Peer Group program?

Our process begins with the collection of loan production and servicing data via the web. About two weeks after the end of the reporting period, we send all participants detailed instructions and definitions for completing our on-line survey. Once the data are collected, we generate a 110 page data book that displays key financial and operating metrics.

The data inputs are thoroughly reviewed by MBA and STRATMOR personnel, who follow-up individually with companies to ensure completeness, accuracy and consistency. Once the data has been “scrubbed” and adjustments have been made, we provide meeting books to participants generally one week before the roundtable meetings.

Our roundtable meetings are conducted offsite and typically last a day and a half. Our discussions focus on business strategies, models used, best practices, industry trends, hot buttons, technologies employed, etc. MBA and STRATMOR prepare a detailed presentation which summarizes the results and provides extensive analysis across all groups and across various reporting periods.

Once all of the roundtables have taken place and any final adjustments have been made, participants receive a final databook in hard-copy and electronic format. The electronic format allows companies to perform their own analyses. In addition, participants receive the updated presentation, which can be used as a template for internal reporting and presentations.

Peer Group M: Megalender/servicer group (typically top 30)
Peer Group A: Large lender/servicer group (typically ranked 31-60)
Peer Group S: Subprime lenders and servicers
Peer Group C: Small/medium sized lender/servicer group
Peer Group E: Thrift Owned mortgage banking group

Typically, Peer Groups M and A meet semi-annually in both the Spring and Fall, and Peer Groups C and E meet once a year in the Spring.

Our current timeline for the Fall 2008 cycle (data for period ending june 30, 2008) is as follows:

July 15 - Web site opens for data entry
September 3 - Data submission due for Groups M and A
September 3 - 17 - Group M and A data reviewed and scrubbed
October 14-15 - Group M and A Roundtable, Chicago

The Spring 2008 PGR program participants included the following:

Advanced Financial Services, Inc.
AmTrust Bank
Assurity Financial Services, LLC
Aurora Loan Services, Inc.
BB&T
BB&T - Alternative Mortgage Lending Division
Charter Mortgage Company
Chase Home Lending
Chase Home Lending (Subprime)
Colonial Savings
Eustis
EverBank Mortgage
First Horizon Home Loans
FirstMerit Mortgage Corporation
GreenTree Servicing
Guild Mortgage
Home Loan Services
HomeStreet Bank
Huntington
ING Direct
M&T Bank
Morgan Stanley Credit Corporation
Mortgage Investors Group
National City Mortgage
Nationstar Mortgage
New South Federal Savings Bank
Ocwen Financial Corporation
PHH Mortgage
Plaza Home Mortgage
PrimeLending
Regions Mortgage
Saxon Mortgage
Shea Financial Services
Sidus Financial
Synovus Mortgage Corporation
Taylor, Bean and Whitaker Mortgage
U.S. Bank
USAA Federal Savings Bank
Wachovia Mortgage Corporation
WAMU

Data Outputs
The survey includes information on the following, among others:

• Production distribution by loan type
• Production income and expenses (expressed in per-loan and basis points) as well as personnel requirements for the following four channels:
  • Retail
  • Broker
  • Correspondent
  • Direct marketing
• Breakdown of sales vs. fulfillment costs
• Production support/post closing costs and personnel
• Servicing distribution by loan type
• Servicing income and expenses (expressed in per-loan and basis points) as well as personnel requirements
• Other costs and personnel data on technology and corporate administration,
• Separate sections on systems used, company profiles and operating models

How do you ensure that the benchmarking data is accurate and can be used for meaningful comparisons between firms?

While benchmarking is never a perfect process, we believe our data is the most accurate, apples-apples data in the country.

We have developed a detailed set of definitions that clearly describe each data element. These definitions are fine-tuned and clarified as necessary each cycle. After over eight years of refinement, we believe our definitions are well organized, clear and complete.

But having clear definitions is only half the battle. Over a period of six to eight weeks, MBA and STRATMOR personnel review and scrub each company data submission in detail. We look for errors, omissions and data inconsistencies and provide a list of follow up items for each participant. When all items are addressed, we prepare the preliminary data books to be used for our Peer Group roundtables.

We believe we are a high-performing mortgage banker. How would we benefit from the Peer Group program?

While some companies clearly perform better than others on an overall basis, we have yet to find a Peer Group company that is “best in class” in every key metric. Therefore, even for the best performing companies, there are always pockets of opportunity. By realizing improvements in weak areas, high performing companies can achieve substantial benefit from ongoing Peer Group participation.

Our business model is different from most other companies. Therefore, what good would it do to compare with “peers”?

While many companies believe their model is unique, they may be surprised to learn that there are other companies that operate in a similar fashion. However, even if a portion of their model is unique, other aspects of their operations may be very similar to peers. For example, if a retail lender sources loans in a unique way, they may have sales costs and sales productivity benchmarks that are not comparable with others in the Peer Group. However, all of the activities and costs after the point of sale may be comparable, including fulfillment (processing, underwriting and closing) and production support (e.g. post closing, secondary, shipping).

Furthermore, there is great value in understanding the competitive market landscape. If you better understand the issues driving your competitors, you can take a more learned approach to competing in the marketplace.

After attending our roundtable meeting, many of our participants are able to identify a subset of companies within the Peer Group that line up particularly well with their own company. They will then analyze their company results against this subset of companies. This allows for the best “apples-apples” comparisons.

How much time is required to compile the Peer Group data?

Compiling the Peer Group data is in fact a time-consuming task. The key drivers of compilation time are:

• Whether or not you are a first-time participant
• Whether or not you are reporting both production and servicing
• How many production channels you have (Retail, Broker/Wholesale, Correspondent, Direct)
• How well your financial statement line items “line up” with Peer Group formats

We estimate that a first time participant with multiple production channels and both production and servicing may require 40 to 60 hours of compilation time. If your firm is a veteran of the program and is perhaps a “production-only” firm the time requirement may be reduced by 50 percent.

While the data compilation process may take 40 to 60 hours at most, the work can be done over a six to eight week period of time. This allows most firms to successfully juggle the resources needed to complete the task.

Also, to accommodate smaller lenders, we have survey deadlines staggered based on the agreed upon timing of the peer group roundtable meeting. For example, the mega-lenders typically have their meeting three months after the end of the reporting cycle. Thus, their data is due sooner. Other groups meet later and therefore have later deadlines for completing the survey information.

How can I justify the cost of the Peer Group program?

The costs of the program range from $5,000 to $12,000 annually depending on company size, frequency of data submissions (annual vs. semi-annual) and whether or not the company has both loan production and loan servicing.

In the end, our participating companies have concluded that the benefits of Peer Group participation far exceed the hard costs and the time and effort required to compile the data.

In the go-forward market, companies who understand their costs, efficiency, productivity and revenue dynamics will gain market share. Participation in the MBA/STRATMOR Peer Group program is critical to gaining an understanding of your performance and an assessment of strategies and operating tactics that can be undertaken to maintain competitiveness in the new market environment.