Mortgage Bank Profits Improve In 3Q

Folks in mortgage banking will agree or disagree, but I heard someone say recently that, “for mortgage banks making money this year has been as easy as falling off a chair.”

I don’t necessarily agree, and besides, many should be saving up for repurchase requests anyway. But the MBA reported Thursday that independent mortgage banks and subsidiaries made an average profit of $1,263 on each loan they originated in the third quarter of 2011, up from $575 per loan in the second quarter of 2011, according to the MBA Third Quarter 2011 Mortgage Bankers Performance Report.

“Higher volume helped profitability as production costs were spread over a greater number of loans,” said Marina Walsh, MBA’s AVP of Industry Analysis. “Third quarter production expenses dropped on a per-loan basis as volume rose, although expenses remained high by historical standards when compared to other quarters with similar volume. At the same time, secondary marketing income [selling loans] rose from $4,006 per loan in the second quarter of 2011 to $4,563 per loan in the third quarter of 2011. Secondary marketing gains improved as primary-secondary spreads widened in the third quarter.”

The full MBA report has lots of interesting stats in easy bullet point form. Here’s the link:

MBA: Higher Volumes & Profit From Mortgage Banks In 3Q