On one hand, the average compensation for loan officers has remained relatively flat even as loan volumes have increased. On the other hand, the performance of individual loan officers and the compensation they receive have grown significantly.
In recent years, mortgage lending has been an incredibly active sector, with record-breaking loan origination volumes. In 2020, mortgage lenders originated a total of $3.75 trillion in mortgages, up from $3.32 trillion in 2019 and an all-time high. This increase in mortgage lending activity has been driven primarily by record-low interest rates and an extreme demand for homebuying, leading to near-unprecedented liquidity.
Despite this increased lending volume, the average compensation for loan officers has remained surprisingly level over the past few years. According to a recent survey by the Mortgage Bankers Association (MBA), the average loan officer compensation stayed at $83,000 in both 2019 and 2020. The MBA also found that a majority of loan officers earned in the range of $50,000 to $149,999 during this time frame. These figures remain close to what they were prior to the influx of loan volume, which suggests that lenders may not be providing their loan officers with additional compensation despite the increased activity.
However, there is evidence that the performance of individual loan officers can have a big impact on their pay. Loan officers who can generate a high volume of loans, close quickly and efficiently, and maintain a high-level of customer service can earn significant bonuses. In fact, the MBA survey found that 5% of loan officers earned well over $200,000 in 2020, compared to just 3% the prior year. This data suggests that while the average loan officer compensations have remained relatively unchanged, the performance of top loan officers is still being rewarded.
Overall, it appears that while average loan officer compensation remains relatively steady, the performance of individual loan officers still plays an important role in determining how much they are paid. By closing loans quickly and offering exceptional customer service, loan officers can increase their chances of earning higher compensation. As the mortgage industry continues to experience an influx of loan originations, it will be interesting to see if we start seeing more loan officers earning premium salaries in the future.
This article was contributed on Jul 02, 2023
