MBA Chart of the Week: Pre-Tax Production Profit of Independent Mortgage Banks

Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of 72.6 basis points ($1,686 on each loan they originated) in the second quarter, up from a reported gain of 33.2 basis points ($825 per loan) in the first quarter, according to the MBA’s Quarterly Mortgage Bankers Performance Report.  

Total production revenue (fee income, secondary marking income and warehouse spread) averaged 372.3 basis points in the second quarter, down from 377.5 basis points in the first quarter. Helped by loan balances that reached a series-high average of $245,394, per-loan production revenues reached a series-high of $8,807 per loan.    

On the expense side, mortgage bankers saw their total loan production expenses decline to 299.7 basis points ($7,120 per loan) in the second quarter, from 344.2 basis points ($7,845 per loan) in the first quarter.  

Including all business lines, 90 percent of the firms in the study posted pre-tax net profits in the second quarter of 2016, up from 73 percent in the first quarter of 2016.  

To view the Chart of the Week, click https://www.mba.org/news-research-and-resources/forecasts-data-and-reports/forecasts-and-commentary/chart-of-the-week.  

(Marina Walsh is vice president of industry benchmarking and research with MBA; she can be reached at mwalsh@mba.org.)