MBA: IMBs Report Production Profits in Fourth-Quarter 2025

Independent mortgage banks and mortgage subsidiaries of chartered banks reported a pre-tax net production profit of $674 on each loan they originated in the fourth quarter of 2025, compared to a net production profit of $1,201 per loan in the third quarter of 2025, according to the Mortgage Bankers Association’s newly released Quarterly Mortgage Bankers Performance Report.

“Net production profits averaged 17 basis points in the fourth quarter of 2025, an increase from losses of 4 basis points in the fourth quarter of 2024,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “Combining both production and servicing operations, 68% of mortgage companies in MBA’s sample posted overall profits in the fourth quarter of 2025, a modest increase from 61% one year ago.”

Added Walsh, “Despite these improvements, fourth-quarter production profits were down from the previous quarter. Compared to the third quarter of 2025, production volume rose, production revenues dropped, and the cost to originate stayed relatively flat.”

Walsh explained that there was an increase in loan applications that locked in September and were recognized in third-quarter earnings rather than fourth-quarter earnings, following relevant accounting rules. Many of these locks were reflected as closed loan volume in the fourth quarter.

“A rise in mortgage servicing rights (MSR) markdowns and amortization from payoffs also negatively impacted overall profits across production and servicing business lines in the final three months of 2025,” said Walsh.

Key Findings of MBA’s Fourth-Quarter 2025 Quarterly Mortgage Bankers Performance Report include:

• The average pre-tax production profit was 17 basis points (bps) in the fourth quarter of 2025, compared to a profit of 33 bps in the third quarter of 2025. The average quarterly pre-tax production profit, from the first quarter of 2008 to the most recent quarter, is 39 basis points.
• The average production volume was $643 million per company in the fourth quarter, up from $634 million per company in the third quarter. The volume by count per company averaged 1,973 loans in the fourth quarter, up from 1,866 loans in the third quarter.
• Total production revenue (fee income, net secondary marketing income, and warehouse spread) decreased to 340 bps in the fourth quarter, down from 359 bps in the third quarter. On a per-loan basis, production revenues decreased to $11,776 per loan in the fourth quarter, down from $12,310 per loan in the third quarter.
• Total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – decreased to 323 basis points in the fourth quarter from 326 basis points in the third quarter. Per-loan costs decreased to $11,102 per loan in the fourth quarter, down from $11,109 per loan in the third quarter. From the first quarter of 2008 to last quarter, loan production expenses have averaged $7,846 per loan.
• The purchase share of first mortgage originations, by dollar volume, was 71%. For the mortgage industry as a whole, MBA estimates the purchase share was at 58% in the fourth quarter of 2025.
• The average loan balance for first mortgages increased to $379,587 in the fourth quarter, up from $373,414 in the third quarter. The average loan balance for total mortgages (firsts, thirds, HELOCs, other) increased to $362,912 in the fourth quarter, up from $355,145 in the third quarter.
• Servicing net financial income for the fourth quarter (without annualizing) was $13 per loan serviced, down from the $29 per loan serviced in the third 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 $90 per loan serviced in the fourth quarter, down from $92 per loan serviced in the third quarter.
• Including all business lines (both production and servicing), 68% of the firms in the report posted pre-tax net financial profits in the fourth quarter, down from 85% in the third quarter.

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-one percent of the 338 companies that reported production data for the fourth quarter of 2025 were independent mortgage companies, and the remaining 19% 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 Falen Pitts at (202) 557-2771 or fpitts@mba.org.