Wholesale Access Completes its Seventh Annual Benchmarking
of Builder-Affiliated Mortgage Companies

For Release July 16, 2007

Wholesale Access completed its Seventh Annual Benchmark Study of Builder-Affiliated Mortgage Companies, a Production Revenue and Expense Comparison. It culminated with a meeting of the senior managers of the participating firms in Denver in June.

"The purpose of the study was to do an accurate measuring of the cost and income structures of builder-owned mortgage companies in 2006," said David Olson, Managing Director of Wholesale Access. "Since inception, our goal has been to carefully define then compile data for six categories of revenue and 27 expense categories so comparisons can be made between different firms' approaches. Participants can then ascertain how their strategies, markets, products, use of technology and so forth affect their income and cost structures in dollars per loan and in basis points and capture. Wholesale Access has spent more than a decade developing a benchmarking methodology for mortgage lenders, both wholesale and retail."

The report consists of 36 charts that highlight income, direct and indirect expenses, production per FTE, productivity by types of workers, unit costs, underwriting methods, loan types, AUS and IT usage, types of software used and websites. According to Project Manager and Managing Director Christine Clifford, the top finding was "the lower expense structure (161 vs. 221 bp) and the relatively higher revenue (252 vs. 208 bp) of builder-affiliated mortgage companes—thanks to greater productivity ($32.2 million of average monthly sales volume per LO vs. $11.7 million)—than independent retail mortgage banks." Other findings dealt with the impact of product mix on profits, state capture data and the effect of geography on profitability.

The study is conducted annually. Participants in this benchmarking included: CTX Mortgage, DHI Financial, First Equity Mortgage, HomeAmerican Mortgage, K. Hovnanian Mortgage, MHI Mortgage, M/I Financial, Pulte Mortgage, Shea Mortgage, Standard Pacific Mortgage, TBI Mortgage and Universal American Mortgage.

Wholesale Access compiles and edits the data then prepares a report that examines the findings. The process culminates in a meeting to discuss the findings and Best Practices. The benchmark process is designed to provide participants with a better understanding of how, why and how much their approach to the business, their costs, revenues and metrics vary from peers. Debra Still, President of Pulte Mortgage, said "In the current industry environment, staying competitive and serving the builder and our mortgage customers is more critical than ever.  Pulte Mortgage uses the results of the Wholesale Access Benchmarking Study, as well as insights gained through stronger relationships with the BAMC peers who participate, to challenge our existing business perspectives with new ideas.  The Study has proven to be an invaluable tool for improving our business processes, organizational structure and best practices."

Wholesale Access is a research, advisory and publishing company founded in 1991 by David Olson and Tom LaMalfa. In addition to benchmarkings, the firm does various mortgage research projects, notably on primary market originators. Next month Wholesale Access will complete Mortgage Brokers 2006, its eighth and latest examination of the demographics, operations, use of technology, operations, sales to wholesalers, etc., of brokerages. At this writing the company is completing its inaugural study and benchmarking of bank home equity operations. In September 2006, the company completed a study of the home equity market. For further information, email Tom LaMalfa at tlamalfa@wholesaleaccess.com or visit the Wholesale Access website at www.wholesaleaccess.com.

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All material ©2007, Wholesale Access Mortgage Research & Consulting, Inc.