Richey May & Co has released its second quarter 2014 Trend Report for Independent Mortgage Bankers. The Trend Report includes the operating results of 37 independent mortgage companies throughout the U.S. and covers all operating models and production volumes. According to the report, loan production among independent mortgage bankers increased by 50 percent over the previous quarter, the first increase in the past three quarters. Purchase volume spiked 62 percent, while refinance volume increased 20 percent over the first quarter 2014.
Unfunded lock pipelines increased among independent mortgage bankers as well, rising 38 percent over the previous quarter. According to Kenneth Richey, managing partner of Richey May, this uptick indicates that the improved market conditions will continue through the coming months.
“The increase in unfunded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well,” Richey said.
In addition to the increase in production, independent mortgage bankers improved profits by an average of 57 basis points, with many realizing up to 100 basis points in improved pre-tax profits over the previous quarter.
The Trend Report for Independent Mortgage Bankers was generated from the results of Richey May Select, the industry’s only benchmarking technology specifically for independent mortgage bankers. The software, which provides up-to-date peer-to-peer benchmarking information on various aspects of their businesses—such as financial, production, employment, warehousing and servicing operations—analyzes data submitted by independent mortgage bankers across the U.S., and compiles a report of the quarter’s notable trends. The quarterly Trend Report highlights key performance indicators, such as overall volume and volume by transaction type, as well as loan margins, operating costs, labor output, and more.
The data used in the report is gathered from Richey May Select subscribers and is provided at no additional costs to the participants. All data sources are kept confidential.
“Independent mortgage bankers’ unit volume, expenses and margins were very close to those they experienced in the third quarter of 2013,” said Keith May, Richey May’s managing director, advisory services. “However, pre-tax profits in the second quarter of 2014 were much higher than in the third quarter of 2013. This is probably because third quarter 2013 was in the middle of a declining market, whereas second quarter of this year was in an improving market.”
