Skip to main content

IMB Production Profits Decrease From Q3 2020 To Q4

Navi Persaud
Mar 24, 2021
Digital photo of an assortment of arrows pointing down.

The Mortgage Bankers Association's Quarterly Mortgage Bankers Performance Report revealed that independent mortgage banks and mortgage subsidiaries of chartered banks had a net gain of $3,738 on each loan they originated in the Q4 of 2020. Unfortunately, Q4's net gain is down from $5,535 per loan in the Q3 of 2020.

"Driven by strong borrower demand and a study-high in average loan balances, production volume for independent mortgage companies reached unprecedented heights, averaging close to $1.5 billion per company in the fourth quarter of 2020. Net production profits were at their third-highest levels, surpassed only by last year's second and third quarter," said Marina Walsh, the MBA's vice resident of Industry Analysis.

"While production profits were still incredibly strong in the fourth quarter, secondary marketing gains declined, resulting in an overall drop in production revenue. Also, production expenses increased for the second straight quarter, despite higher volume that historically reduces per-loan costs. Expenses rose by almost $500 per loan from the previous quarter, as personnel costs increased across sales, fulfillment, production support, and corporate overhead," added Walsh.

According to the report, combining both production and servicing operations, 95% of firms posted overall profitability for the fourth quarter of 2020. Additionally, the average pre-tax production profit was 137 basis points (bps) in the fourth quarter of 2020, down from an average net production profit of 203 bps in the third quarter of 2020, but up on a year-over-year basis from 46 basis points in the fourth quarter of 2019. The average quarterly pre-tax production profit, from the third quarter of 2008 to the most recent quarter, is 53 basis points.

According to the MBA's report, the average production volume was $1.47 billion per company in the fourth quarter, up from $1.34 billion per company in the third quarter. The volume by count per company averaged 5,049 loans in the fourth quarter, up from 4,732 loans in last year's third quarter.

Meanwhile, the total production revenue decreased to 421 bps in the fourth quarter, down from 475 bps in the third quarter. On a per-loan basis, production revenues decreased to $11,676 per loan in the fourth quarter, down from $12,987 per loan in the third quarter.

Click here to view the MBA's full Quarterly Mortgage Bankers Performance Report.

Published
Mar 24, 2021
Houston-Based Stewart Acquires Title First Agency

Ohio-Based Agency Has 20 Offices And Operates in 32 States

Industry News
Jul 28, 2021
Planet Home Lending Reports Total Origination Volume Of $6.8B In Q2 2021

Planet Home Lending's total origination volume reached $6.8 billion in Q2 2021, up 77% from $3.9 billion in Q2 2020.

Industry News
Jul 22, 2021
FHFA Ends Controversial Refinance Fee

The FHFA announced that Fannie Mae and Freddie Mac will eliminate the Adverse Market Refinance Fee for loan deliveries, starting August 1, 2021.

Analysis and Data
Jul 19, 2021
Interfirst Mortgage Launches ONE, Backed By Non-Owner Occupied Properties

ONE is a unique product built on a single interest rate with no adjustments and qualifies off the cash flow of the rental property.

Industry News
Jul 16, 2021
Global Digital Lending Market Projected To Reach $27B By 2028

The Global Digital Lending Platform Market was valued at $7.14 billion in 2020 and is projected to reach $27.07 billion by 2028.

Analysis and Data
Jul 14, 2021
FOMC Discusses Raising Interest Rates

Inflationary pressures have finally forced the Federal Open Market Committee (FOMC) to discuss raising interest rates and tapering its bond-buying program.

Analysis and Data
Jul 14, 2021