Independent mortgage bankers returned to profitability in 2025, as higher revenue per loan and lower production expenses helped lift average net production income to $443 per loan, according to the Mortgage Bankers Association.
That marked a turnaround from the prior year, when firms reported weaker results, and brought average production margins to 21 basis points, up from 10 basis points in 2024.
The full-year result, however, reflects a year of uneven performance. Independent mortgage banks and mortgage subsidiaries of chartered banks reported a loss of $28 per loan in the first quarter, before rebounding to $950 per loan in the second quarter and peaking at $1,201 per loan in the third quarter. Profitability then moderated to $674 per loan in the fourth quarter.
Total production revenue averaged 373 basis points in 2025, supported by gains in secondary marketing income and other production-related revenue. At the same time, lenders reduced expenses, with average production costs falling to $11,090 per loan, driven in part by lower personnel and volume-related expenses.
Quarterly data shows how closely profitability tracked that cost structure. Production expenses dropped from $12,579 per loan in the first quarter to $10,965 in the second quarter, helping drive the return to profitability as volume improved.
Loan production also increased on a per-company basis over the course of the year, with stronger activity in the second half contributing to higher revenue and improved operating leverage.
The lending environment remained heavily purchase-driven. Purchase originations accounted for roughly 80% or more of total volume across 2025, limiting refinance-driven revenue opportunities and placing greater emphasis on borrower acquisition and transaction execution.
The share of profitable firms also shifted meaningfully during the year. Just 58% of companies reported profits in the first quarter, compared with 85% by the third quarter, reflecting broader improvement across the industry as conditions stabilized.
Even with the return to profitability, margins remained below long-term averages, indicating that lenders continue to operate in a constrained environment despite improved results.
MBA noted that including servicing income significantly improves overall financial performance, underscoring the role servicing portfolios continue to play in stabilizing earnings beyond production activity.
