Independent Mortgage Banks’ Profits Per Loan Surge in 2019 – NMP
Industry News

Independent Mortgage Banks’ Profits Per Loan Surge in 2019

Apr 17, 2020
Profit chart showing growth
A headshot of Keith Griffin
Senior Editor

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks saw their profits per loan increase four times over their 2018 numbers. Profits spiked because production costs per loan dropped dramatically.
 
The numbers were released today in the Annual Mortgage Bankers Performance Report, put out by the Mortgage Bankers Association (MBA). The report shows IMBs made an average profit of $1,470 on each loan they originated in 2019, up from $367 per loan in 2018.
 
Production volume on average increased by almost one-third per IMB. Also, in basis points (bps), the average production profit (net production income) was 58 bps in 2019, compared to 14 bps in 2018. The average loan balance for first mortgages reached a study-high of $266,533 in 2019, up from $251,084 in 2018. 
 
Marina Walsh, MBA's industry analysis vice president, said in a statement, "After an unfavorable first quarter, independent mortgage companies saw significant improvement in profitability starting in the second quarter, driven by a jump in refinancing activity from the steady decline in mortgage rates. As volume escalated, production costs dropped from 2018 levels by $743 per loan."
 
Added Walsh, "For companies holding mortgage servicing rights (MSR), one downside was that prepayment activity triggered heavy MSR amortization and write-downs. These write-downs were particularly painful for servicers that did not hedge their MSRs." She said profits on the production side of the business generally compensated for servicing losses. Including both production and servicing operations, 92 percent of the firms posted pre-tax net financial profits in 2019, compared to only 69 percent of firms in 2018.
 
 
 
About the author
A headshot of Keith Griffin
Senior Editor
Keith Griffin is a senior editor at NMP.
Link copied
Published
Apr 17, 2020
Get the NMP Daily
Analysis and Data
Redfin: Homebuyers Gain Leverage, But Pending Sales Keep Sliding

Pending sales fall 16.4% from a year ago despite lower home prices and mortgage payments, as sellers retreat from a weakening market

Home prices are falling. Mortgage payments are easing. Sellers are becoming more willing to negotiate. Yet the housing market keeps losing buyers.Pending home sales fell 16.4% year over year during the four weeks ending Nov. 1, reaching their lowest level in Redfin's weekly ...

Continue reading
Tech
New AI-Run Mortgage Startup Builds Database Of 224,000 LOs

LenDb.ai is making LO records available to AI assistants, offering a potential new way for borrowers to find originators

A new mortgage technology startup is betting that borrowers will increasingly turn to artificial intelligence to find a loan originator, and it wants to make sure AI knows whom to recommend.LenDb.ai, launched Thursday by venture studio Draper Goren Blockchain, has assembled ...

Continue reading
Renew your NMLS License — for free.

Enjoy access to a free NMLS renewal class when you attend an in-person event.

Find an event
More from
Industry News
Fed Holds Rates, But Pricing Pressures Persist

Rising Treasury yields and fresh inflation data complicate rate locks, borrower qualification, and lender margins as markets anticipate another hike in December

Industry News
Oct 29, 2026
Zippy Adds Capital For Manufactured-Home Lending Push

The $20 million investment from Saluda Grade will support expansion beyond 27 states and new loan products across wholesale, retail, and community channels

Industry News
Oct 16, 2026
Inflation Hits 3.7%, Putting Mortgage Rate Relief At Risk

September’s inflation pickup puts recent rate improvements at risk, potentially eroding affordability gains from lower home prices and seller concessions

Industry News
Oct 14, 2026
PLACE Acquires Ardley, Expanding Push To Turn Existing Borrowers Into New Loans

The latest deal connects borrower retention technology with Maxwell's origination platform and PLACE's real estate network, creating new opportunities for lenders

Industry News
Oct 09, 2026
Equifax, TransUnion Launch New Tools To Cut Credit Report Costs

Both bureaus introduce ways to purchase credit scores separately from reports, while Equifax reports growing VantageScore adoption and extends $1 pricing through 2028

Industry News
Oct 09, 2026
Newrez, eXp Realty Form Joint Venture To Target Purchase Business

Revenos Mortgage is set to launch in early 2027, replacing eXp's joint venture with Kind Lending

Industry News
Oct 08, 2026