The Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report
finds that independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $1,600 on each loan they originated in Q1 of 2020, up from a reported gain of $1,182 per loan Q4 of 2019.
“Mortgage production profits were strong in the first three months of 2020–despite a decline in production volume from the fourth quarter and March’s severe market volatility sparked by the COVID-19 pandemic,” said Marina Walsh, MBA’s vice president of industry analysis. “As credit spreads widened, revenues grew by 25 basis points from the fourth quarter, offsetting a reported increase in expenses.”
Average production volume was $728 million per company in Q1, down from $800 million per company in Q4 of 2019. The volume by count per company averaged 2,654 loans in Q1, down from 2,947 loans the previous quarter.
“Overall, it was a solid showing for independent mortgage banks–particularly for a first quarter—with 78% reporting profitability across production and servicing operations, compared to 84% in the fourth quarter,” said Walsh.