Lenders Can Now Close 40% More Volume Without Adding Staff — Here's the Catch
"I've heard multiple lenders tell me they can do 40% more volume without adding any people right now; all they need to add is maybe a funder or a post-closer," Brett Ludden, managing director and head of mortgage solutions at Milliman, told HousingWire (HousingWire, Aug. 19, 2026). That's a genuinely striking efficiency gain. It's also happening at exactly the moment margins are as thin as they've been in decades.
The Efficiency Gain Is Real
Ludden's observation reflects a real shift in how much volume the same headcount can now absorb, driven by better technology and tighter processes built up over several difficult years. His pointed question to lenders still carrying early-2026 staffing levels: "Why wouldn't you be cutting to get as lean as you can?"
But the Margin Picture Explains Why It Matters So Much
MBA data covering independent mortgage banks and bank subsidiaries shows average net production profit sat at just 25 basis points in the second quarter of 2026, compared to a recent peak of 89 basis points in the first quarter of 2021 (HousingWire). Marina Walsh, MBA's vice president of industry analysis, put it directly: "I've been tracking this industry for over two decades, and I've never seen such a long period of time of compressed margins."
That's the real story behind the efficiency number. It's not just that lenders can do more with the same staff. It's that thin margins leave almost no room to carry cost that isn't directly earning its keep.
Why Headcount Hasn't Caught Up With Reality
Per MBA's quarterly production report, the average number of production employees per company fell from 555 in Q2 2022 to 337 in Q1 2026, and loan officer headcount nationwide dropped from 124,805 (Q4 2021 peak) to 86,192 (Q1 2026), according to the Nationwide Multistate Licensing System. Headcount has come down significantly already. Ludden's point is that, for many lenders, it still hasn't come down enough relative to what current technology and process efficiency actually require.
What This Tension Actually Means for a Brokerage
A brokerage sitting on fixed, in-house headcount sized for a busier era is carrying cost that 25-basis-point margins can't comfortably absorb. The alternative isn't necessarily cutting people, it's restructuring how capacity gets added when volume does pick back up, and how it contracts when it doesn't, without every swing meaning a hiring or layoff decision.
This is exactly where a role-specific, flexible staffing model earns its keep. A dedicated specialist team, covering setup, disclosure, closing, funding, or post-closing, scales with actual file volume instead of sitting as fixed overhead through a margin environment this tight.
Frequently Asked Questions
How much more volume can lenders handle without adding staff right now? Industry sources cited by Milliman's Brett Ludden suggest some lenders could absorb roughly 40% more volume with only minor additions, such as a funder or post-closer, given current technology and process efficiency.
Why are margins so compressed right now? MBA data shows average net production profit at 25 basis points in Q2 2026, down sharply from an 89-basis-point peak in Q1 2021, the longest stretch of compressed margins MBA's own industry analyst has tracked in over 20 years of following the sector.
What's the practical takeaway for a brokerage carrying fixed headcount? Flexible, role-specific staffing that scales with actual volume, rather than sitting as fixed cost regardless of how busy a given month is, is better positioned to operate profitably in a margin environment this tight.
See how a flexible staffing model fits this margin environment. Contact BrokerVA.