MBA Study Shows Mortgage Banker Production Profits Dropped in First-Quarter 2010
|July 20, 2010|
Independent mortgage bankers and subsidiaries made an average profit of $606 on each loan they originated in the first quarter of 2010, down from $890 per loan in the fourth quarter of 2009 and $1,088 in the first quarter of 2009, according to the Mortgage Bankers Association (MBA)’s 1st Quarter 2010 Mortgage Bankers Production Survey released.
The decline was driven by a drop in the average production volume for each firm to $157.8 million in the first quarter of 2010, compared to $216.5 million in the fourth quarter of 2009. In addition, production operating expenses rose to $5,147 per loan in the first quarter 2010 compared to $4,402 per loan in the fourth quarter of 2009.
“It is extremely difficult for mortgage companies to effectively manage staffing levels. Either companies are stretching to meet the incredible demand, or they are carrying excess capacity which drives up per-loan personnel expense,” said Marina Walsh, MBA's Associate Vice President of Industry Analysis. “Despite this challenge as originations declined in the first quarter, the independents and bank subsidiaries still produced an average of thirty two basis points of production profit, primarily resulting from higher secondary marketing gains.”
Among the additional key findings of MBA’s Quarterly Mortgage Bankers Performance Report are: