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
Foreclosure Inquiries Reach Highest Level Since 2020

LegalShield points to rising homeowner distress following the expiration of pandemic-era FHA relief programs

Foreclosure inquiries rose for the third straight quarter to their highest level since March 2020, according to LegalShield. The company tracks homeowners seeking legal assistance before a foreclosure filing, acting as an early warning signal of a coming surge.Historically, ...

Continue reading
Regulation and Compliance
Illinois Changes Property Tax Foreclosure Process To Return Surplus Equity

Borrowers can save remaining home equity after delinquent property taxes and fees are paid

Illinois has changed its property tax foreclosure system to require that surplus equity from a property sale be returned to the former owner after delinquent taxes, interest and fees are paid.Gov. JB Pritzker signed the legislation into law Friday, July 10. The measure was p...

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
First Major Housing Reform In Decades Becomes Law Without Trump's Signature

Bipartisan ROAD to Housing Act advances supply, construction, and mortgage reforms despite White House protest

Industry News
Jul 10, 2026
Mortgage Star Conference Honors Women Shaping The Future Of Mortgage Leadership

MWLC honors leaders driving innovation, mentorship, and growth across the mortgage industry

Industry News
Jul 09, 2026
June Jobs Report Improves Mortgage Rate Outlook

Slower hiring strengthens bonds and eases concerns over additional Fed tightening

Industry News
Jul 02, 2026
NEXA Founder Mike Kortas Launches evoLend To Help Originators Retain Borrowers

New Fannie Mae-, Freddie Mac- and Ginnie Mae-approved mortgage servicer aims to keep originators connected to borrowers through servicing data, payoff visibility and retention tools

Industry News
Jul 02, 2026
President Trump Cancels 21st Century ROAD To Housing Act

Trump cancels signing the bipartisan housing bill, leaving affordability package in limbo

Industry News
Jun 24, 2026
Commercial, Multifamily Mortgage Debt Tops $5 Trillion In Q1

MBA says outstanding debt grew by $26.3 billion in the first quarter, led by multifamily lending and increased holdings from banks, agencies, and life insurers

Industry News
Jun 18, 2026