Mortgage's Moneyball Problem

Mortgage is obsessed w/ volume.

We rank it, recruit it, throw giant comp packages at it & then send the biggest producers to Cabo & put them on stage to explain how everyone else can be more like them.

But what if $100M of production isn’t always worth $100M of production?

One producer might need a small army, bespoke marketing & constant pricing exceptions to get there. Another might generate the same volume inside a much leaner, more repeatable model.

So we know exactly who produces the most, but we’re a lot less obsessed w/ figuring out who actually creates the most value.

Karen Postiglioni takes a swing at mortgage’s Scott Hatteberg challenge: maybe we’re looking at the wrong stats? Plus, I’ve got some fresh M&A news, details on who’s selling servicing & more.

By Karen Postiglioni

Moneyball wasn’t really a story about baseball statistics. It was a story about what happens when an industry gets really good at measuring a few familiar things & starts confusing them w/ the outcome it actually wants.

Baseball had batting average, stolen bases and players who looked like stars on a scorecard. Mortgage has production volume.

We rank it. Recruit it. Pay for it. Put it on stage. Build President’s Clubs around it. But here’s the Moneyball question: what if the same $100M of production creates very different economics depending on how that production is generated?

Imagine two ways to originate $100M.

One comes from a mega-producer w/ a dedicated team, more customized marketing support & more frequent pricing concessions.

The other comes from five $20M producers working w/ a more standardized model, w/ shared infrastructure, fewer exceptions & stronger pull-through.

Now suppose the difference in what the lender ultimately keeps is only 10 basis points. 10bps on $100M is $100K.

It doesn’t take some outrageous cost structure to get there. A few bps can disappear through additional pricing concessions. A few more through dedicated marketing & support. Add differences in pull-through or rework.

Same $100M of production, but measurably different economics for the house. And 10bps matters in a business w/ such thing margins. MBA reported that IMBs & mortgage subsidiaries of chartered banks averaged just 21 bps of pre-tax net production income in ‘25.

The point isn’t that every mega-producer costs the lender an extra 10bps; it’s that you can’t tell from the production number alone.

We’re very good at filling out the box score on production like dollar volume, units, purchase mix, refi mix & average loan size.

There are plenty of publications & data companies that rank LOs this way, for free or for a price. Take your pick.

What we don’t see publicly is what that production contributed after the resources required to generate it. What did that production require in marketing? Support? Pricing concessions? What was the pull-through? Acquisition cost? How much rework did operations absorb?

Those numbers live inside the lender.

And STRATMOR argues lenders should have visibility into profitability at the loan, LO, branch & channel level, including direct production costs, marketing & support, pricing concessions & lock-extension costs.

So why do we still talk about producer value so often as though volume tells us the whole story, instead of asking which lineup actually creates the best economics?

Start w/ production & revenue generated.

Then account for pricing concessions, cures, acquisition & marketing expense, fulfillment costs, fallout, lock extensions, rework & the resources required to support the business.

Layer in pull-through, product mix &, where relevant, servicing or recapture value.

Now look at the business through three lenses: Production. Contribution dollars. Resources required.

Maybe the mega-producer still creates more contribution dollars & deserves every dollar of support. Or maybe five smaller producers collectively create better economics w/ less concentration risk and a more repeatable operating model.

Great! Now you know.

Maybe the person ranked No. 8 by volume creates an unusually attractive return for the enterprise. Maybe the producer everyone is trying to recruit looks a lot less appealing once you price in what it actually takes to support the production they bring w/ them.

That’s the Moneyball question — not whether stars are valuable, but whether the statistic we use to identify them is telling us enough.

Mortgage lenders spend an enormous amount of money recruiting, compensating & supporting production. They already have most of the data they need to know what that production is actually worth. The question is whether they’re using it.

Disclaimer: Neither I, James Kleimann, nor The Mortgage Scoop is advocating that anyone start tinkering w/ LO comp based on this article. Please talk to your compliance & legal experts before deciding what is or isn’t Reg Z compliant. You can, however, still do the math.

Michigan-based Ross Mortgage Corporation & Max Leaman’s LoanPeople have merged, multiple sources told The Scoop. Neither Tim Ross nor Leaman immediately responded to a request for comment. LoanPeople has done about $500M in volume YTD, per RETR, while Ross has done a touch over $200M. There was talk about the deal being struck at TMC last week. We’ll have more details — including the impact on vendors — in a future edition. 

Meanwhile, as I reported exclusively on Friday, Eleven Mortgage, the wholesale sister company to Benchmark Mortgage (dba of Ark-La-Tex Financial Services), is winding down in the next 60 days. The announcement came not long after the retirement of Kim Kriel, one of the industry’s top AEs.

Interestingly, the shutdown announcement also came w/ some pretty wild guideline changes, including a lock policy change. “Lock extension pricing increases from 2 bps per day to a flat 100 bps for a one-time, 15-day extension only. Extensions are no longer available in increments shorter than 15 days, and no further extensions are available after the one-time 15-day extension.”

Adam Millstein, Eleven Mortgage’s division president, told me he’s hoping the majority of the sales & ops team can be ported over to a new lender. 

“We are a very experienced, very close team that all want to stay together,” he said. “That will be tough in this environment, but have spoken to some companies that are interested in all or most of the group. The key for us is finding the best fit.”

Meanwhile, Benchmark/Ark-La-Tex Financial Services LLC has been losing LOs & production over the past year, per RETR.

And here’s a link to the bananas 🍌 legal battle Benchmark is waging w/ its former top LO Denise Donohue, & head of its ex-head of retail, Marty Preston.

Servicing transfers, excluding M&A activity, remained active in Q2’26, with $141.8 billion in unpaid principal balance changing hands during the quarter. Transfers represented 1.6% of total servicing outstanding, up from $134.1 billion in Q1’26.

Lakeview Loan Servicing and Carrington Mortgage Services were among the most active buyers, acquiring $27.2 billion and $22.1 billion, respectively. UWM ($39.1 billion) and Rocket Mortgage ($20.2 billion) were the largest sellers. Overall, nonbank servicers accounted for 82.2% of MSR purchase activity, consistent with their growing role in both agency and government servicing markets.

Notable buyers during the quarter that had not ranked among the top 10 MSR buyers in the previous 12 months included PNC Bank ($17.6 billion), Valon Mortgage ($5.2 billion), and Ocwen ($4.2 billion). Notable sellers that had not ranked among the top 10 MSR sellers during the previous 12 months included Mortgage Research Center ($8.2 billion), Sailfish Servicing ($5.2 billion), and CMG Mortgage ($4.8 billion).

The 2021 vintage accounted for the largest share of MSRs transferred at 26%, compared with 24% of total serviced volume. The 2025 vintage followed at 24% of transfers, compared with 11% of total serviced volume.

The 2.50% to 2.99% interest rate bucket accounted for the largest share of MSRs transferred at 19%, compared with 21% of total serviced volume. The 3.00% to 3.49% bucket followed at 15% of transfers, compared with 16% of total serviced volume.

This report is brought to you by Milliman. Milliman provides strategic and quantitative consulting services across the mortgage market with expertise in origination, servicing, and capital investment.

Source: Fannie Mae, Freddie Mac, and Ginnie Mae MBS Data Disclosure

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