Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a net gain of $2,594 on each loan they originated in the third quarter of 2021, up from a reported gain of $2,023 per loan in the second quarter of 2021, according to the Mortgage Bankers Association’s (MBA) newly released Quarterly Mortgage Bankers Performance Report.
“Net production profit rebounded in the third quarter of 2021 after a drop-off in the second quarter, but was down more than half from the record profit one year ago,” said Marina Walsh, CMB, MBA’s vice president of Industry Analysis, in a statement. “Production revenue was the difference-maker, increasing more than 20 basis points from the second quarter. However, production revenue was still down almost 80 basis points compared to a year ago.”
“Per-loan production expenses continued to rise for the fifth consecutive quarter, reaching the second-highest level ever reported,” added Walsh. “Rising sales costs that are often determined based on a percentage of loan balances was one primary factor for the increase in expenses. The average loan balance for first mortgages reached another study-high in the third quarter, passing the $300,000 threshold for the first time to over $308,000.”
Combining both production and servicing operations, 92% of firms posted overall profitability for the third quarter of 2021, compared to 84% in the second quarter.
Source: MBA
