Chart of the Week: IMB Net Production Income and Percent of IMBs With Pre-Tax Net Income > Zero

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported pre-tax net production profit of 25 bps ($950 per loan) on each loan they originated in the second quarter of 2025, compared to a net loss of 7 bps ($28 per loan) in the first quarter of 2025, according to the Mortgage Bankers Association’s (MBA) newly released Quarterly Mortgage Bankers Performance Report. This marked the highest level of pre-tax net production income for IMBs since the fourth quarter of 2021 and was driven primarily by the seasonal pickup in purchase volume. Meanwhile, net servicing financial income also improved, as impairments on mortgage servicing rights were minimal.

For this Chart of the Week, the six-year trending in net production income is displayed alongside the percentage of mortgage companies that were profitable, including both the production and servicing lines of business. In the second quarter, 80% of IMBs were profitable–the highest percentage since the third quarter of 2021. Many more mortgage companies were profitable in the most recent quarter, a substantial improvement from the low of 25% in the fourth quarter of 2022.

Note: Pre-tax net production income is defined as total revenues (fee income, secondary marketing income, value of capitalized servicing/servicing released premiums at origination and net warehouse spread) minus fully-loaded production costs (sales, fulfillment, production support and corporate costs), divided by production volume in dollars ($), multiplied by 10,000 for basis points, and divided by loan production count for dollars per loan. 

– Jenny Masoud (jmasoud@mba.org); Marina Walsh, CMB (mwalsh@mba.org)