In January 2021, Loan Vision released Dr. Schell’s white paper that addressed several topics including the IRLC Fair Value. This March 2, 2021 white paper provides a valuation update based on 12-31-20 secondary margins common among mortgage companies.
As noted in the January white paper, the IRLC fair value assessment is significantly influenced by its future net cash flow. The future net cash flow is impacted by the future gain on sale revenue. If the future revenue is greater than in prior years, as is the case as of 12-31-20, then the value of the IRLC will be higher than in previous years.
The purpose of this supplement white paper is to identify how the year-end 2020 IRLC value has increased and to respond to questions that surfaced as readers absorbed the first IRLC fair value white paper.