MBANow: Marina Walsh Discusses Mortgage Industry Performance, Trends

The Mortgage Bankers Association released a new MBANow video featuring MBA Vice President of Industry Analysis Marina Walsh, who discusses the recent MBA Quarterly Mortgage Bankers Performance Report.  

The report measures independent mortgage banks’ production profitability and costs. Walsh shared results of the latest report and offered predictions for industry volume going forward.  

The video can be viewed at https://www.youtube.com/watch?v=HI7NV1-nOWQ&feature=em-uploademail.  

“The biggest takeaway is that production profitability in the first quarter of 2017 was weaker than what we’ve seen in previous Performance Reports dating back to 2008,” Walsh said. “This was combined with a drop in overall mortgage volume during the quarter.”  

Walsh said this drop could result in mortgage firms looking at ways to improve efficiencies. “There are business decisions they may be considering, but at the same time there are two silver linings. The first silver lining is the fact that we can’t ‘overstate’ the first quarter. It’s just the first quarter of the year, and historically, based on our data, the first quarter is generally more difficult than the second quarter and the third quarter due to seasonality.”  

The second silver lining, Walsh said, is that these numbers only represent the production side of the business. “Many independent mortgage companies are now holding loans and holding the servicing rights on those loans, which means they have servicing operations as well,” she said. “With an increase in interest rates, valuation of servicing rights increase, which improves profitability.”    

Looking ahead, Walsh anticipates a pickup in volumes in the second and third quarters.  

Other videos in the MBANow series can be viewed at the MBA YouTube channel, https://www.youtube.com/watch?v=Swk2VUJeZFI&feature=em-uploademail. The videos are also available on the MBA Insights landing page, https://www.mba.org/publications/insights/insights-publication##SubscriberID####RND##&PageID=21109.