Q1 Brings Mixes Results to Independent Mortgage Banks

Independent mortgage banks and mortgage subsidiaries of chartered banks experienced a mix of good and not-so-good news in the first quarter of this year, according to new data from the Mortgage Bankers Association (MBA).

During the first quarter, independent mortgage banks and mortgage subsidiaries of chartered banks enjoyed a net gain of $825 on each originated loan, up from the $493 per loan gain in the fourth quarter of 2015 but below the $1,447 per loan in the first quarter of 2015.

The average production volume was $517 million per company in the first quarter, down from $538 million per company in the previous quarter. And while the average pre-tax production profit was 33 basis points (bps) in the first quarter was higher than the 22 bps level of the fourth quarter, it was below the 60 bps level in the first quarter of 2015.

Furthermore, total production revenue (fee income, secondary marking income and warehouse spread) increased to 378 bps in the first quarter, up from 362 bps in the fourth quarter, but total loan production expenses—including commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations—increased to $7,845 per loan in the first quarter of 2016, from $7,747 in the fourth quarter.