Skip to main content

Q1 Profits Down for Independent Mortgage Banks

Phil Hall
Jun 06, 2017
Independent mortgage banks and the mortgage subsidiaries of chartered banks brought in a net gain of $224 on each loan they originated in the first quarter

Independent mortgage banks and the mortgage subsidiaries of chartered banks brought in a net gain of $224 on each loan they originated in the first quarter, a significant drop from the reported gain of $575 per loan in the fourth quarter of 2016, according to the Mortgage Bankers Association’s (MBA) Quarterly Mortgage Bankers Performance Report.
 
Average production volume was $455 million per company in the first quarter, down from $690 million per company in the fourth quarter of 2016. The volume by count per company averaged 1,944 loans in the first quarter, below the 2,811 loans from the previous quarter. The average pre-tax production profit was 10 basis points (bps) in the first quarter—it 24 bps in the fourth quarter.
 
But there were increases in the first quarter: Total loan production expenses hit a study-high of $8,887 per loan in the first quarter, considerably higher than the $7,562 in the fourth. Personnel expenses averaged $5,802 per loan in the first quarter, compared to $5,001 per loan in the fourth quarter. But productivity dropped to 1.7 loans originated per production employee per month in the first quarter, below the 2.7 level in the previous quarter.
 
“The drop in overall production volume in the first quarter of 2017 resulted in the highest per-loan production expenses reported since inception of our study in the third quarter of 2008,” said Marina Walsh, MBA’s vice president of industry analysis. “While higher production revenues mitigated a portion of the cost increase, production profitability nonetheless declined by more than half the previous quarter. For those mortgage bankers holding mortgage servicing rights (MSR), an increase in mortgage interest rates resulted in MSR valuation gains and helped overall profitability.”

 
Published
Jun 06, 2017
ChainLogix Appoints New Vice President, Operations

Jeryl Graham hired to accelerate growth in title & mortgage services.

Industry News
Oct 15, 2021
JPMorgan Chase To Commit $8.4M To Improve Household Stability For The Underserved

JPMorgan Chase announced six organizations that will receive philanthropic capital as part of the firm’s $400 million five-year commitment to improve housing affordability and stability for Black, Hispanic and Latino, and other underserved households.

Community
Oct 15, 2021
SRE Mortgage Alliance 'Restructuring & Reorganizing'

Owner of technology-based wholesale residential mortgage lender in El Segundo to determine organization's future.

Wholesale
Oct 15, 2021
Ginnie Mae Issued Record MBS Volume In FY2021

The record $939 billion issued included nearly $73 billion in September.

Industry News
Oct 14, 2021
UWM Completes Test Of Cryptocurrency Mortgage Payments

United Wholesale Mortgage evaluated and accepted the first-ever cryptocurrency mortgage payment in September and an additional five payments in October from borrowers.

Industry News
Oct 14, 2021
Arvielo Re-Appointed To HUD Advisory Committee

Nationwide mortgage lender New American Funding’s Co-Founder and President Patty Arvielo has been re-appointed to serve on the U.S. Department of Housing & Urban Development's Housing Counseling Federal Advisory Committee.

Industry News
Oct 13, 2021