A point the book makes numerous times: the human labor cost to produce a car at GM is less than that required to produce a saleable mortgage. (Both around $2k)
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“Blockchain technology is the future, albeit not the immediate future.” <— Did I mention technical competence was not the industry’s defining strength?
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Apparently the author had lunch at IBM which explained to him how Blockchain means he’ll never have to doubt the authenticity of a bank statement ever again, in case you wondered who pays IBM money or why.
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Total cost of writing a mortgage averages $8.8k, which (if you express costs in basis points of the total loan value) allocates 6bps to software and 200 to employee compensation, with about half of that going to the originator (sales rep).
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Quote: One seasoned and cynical executive defined mortgage banking as “the systematic transfer of loan revenue and shareholder capital from shareholders to loan officers [sales reps], who bear no risk with respect to repurchase, prepayment, or regulatory actions.”
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I could seriously quote this book to you all day, but the mortgage needs paying, so: just go read it.
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End of conversation
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