MBA: IMBs Report Production Profits in Third Quarter

Independent mortgage banks and mortgage subsidiaries of chartered banks reported a pre-tax net production profit of $1,201 on each loan they originated in the third quarter, compared to a net production profit of $950 per loan in the second quarter of 2025, according to the Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report.

“After a series of volatile quarters since 2021, mortgage companies delivered healthier results in the third quarter,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “Combining both production and servicing operations, roughly 85% of the more than 325 mortgage companies in our sample posted overall profits.”

Noted Walsh, “While third-quarter closed loan volume was relatively flat, and per-loan production expenses rose slightly compared to the second quarter, the increase in recorded production revenue drove profits higher in the third quarter.”

Walsh further explained that there was a surge in loan applications that locked in September and were recognized in earnings for the quarter. After factoring in fall-out, most of these locks will be reflected as closed loan volume in the fourth quarter, along with mark-to-market revenue adjustments.

Key findings of MBA’s Third-Quarter 2025 Quarterly Mortgage Bankers Performance Report include:

• The average pre-tax production profit was 33 basis points in the third quarter of 2025, compared to profit of 25 basis points in the second quarter of 2025. The average quarterly pre-tax production profit, from the first quarter of 2008 to the most recent quarter, is 40 basis points.

• The average production volume was $634 million per company in the third quarter, down slightly from $636 million per company in the second quarter. The volume by count per company averaged 1,866 loans in the third quarter, up from 1,862 loans in the second quarter.

• Total production revenue (fee income, net secondary marketing income, and warehouse spread) increased to 359 basis points in the third quarter, up from 346 basis points in the second quarter. On a per-loan basis, production revenues increased to $12,310 per loan in the third quarter, up from $11,914 per loan in the second quarter.

• Total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to 326 basis points in the third quarter of 2025 from 321 basis points in the second quarter of 2025. Per-loan costs increased to $11,109 per loan in the third quarter, up from $10,965 per loan in the second quarter of 2025. From the first quarter of 2008 to last quarter, loan production expenses have averaged $7,799 per loan.

• The purchase share of first mortgage originations, by dollar volume, was 82%. For the mortgage industry as a whole, MBA estimates the purchase share was at 67% in the third quarter of 2025.

• The average loan balance for first mortgages decreased to $373,414 in the third quarter, down from $374,151 in the second quarter. The average loan balance for total mortgages (firsts, seconds, HELOCs, other) decreased to $355,145 in the third quarter, down from $355,558 in the second quarter.

• Servicing net financial income for the third quarter (without annualizing) was $29 per loan serviced, about flat compared to the $30 per loan serviced in the second quarter. Servicing operating income, which excludes MSR amortization, gains/loss in the valuation of servicing rights net of hedging gains/losses, and gains/losses on the bulk sale of MSRs, was $92 per loan serviced in the third quarter, slightly up from $90 per loan serviced in the second quarter.

• Including all business lines (both production and servicing), 85% of the firms in the report posted pre-tax net financial profits in the third quarter of 2025, up from 80% in the second quarter of 2025.

MBA’s Mortgage Bankers Performance Report series offers a variety of other performance measures on the mortgage banking industry including revenue and cost breakouts, productivity, product mixes for originations and servicing volume and pull-through rates.

MBA’s Mortgage Bankers Performance Report is intended as a financial and operational benchmark for independent mortgage companies, bank subsidiaries and other non-depository institutions. Eighty-two percent of the 333 companies that reported production data for the third quarter of 2025 were independent mortgage companies, and the remaining 18% were subsidiaries and other non-depository institutions.

There are five Mortgage Bankers Performance Report publications per year: four quarterly reports and one annual report. To purchase or subscribe to the publications, please visit www.mba.org/PerformanceReport. Media wishing to view a copy of either report should contact MBA’s Falen Pitts.