Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $1,654 on each loan they originated in the first quarter of this year, up from $1,093 per loan in the fourth quarter of 2011, according to new data from the Mortgage Bankers Association (MBA).
The MBA reports that the average production profit (net production income) was 82.41 basis points (bps) in the first quarter, compared to 58.49 bps in the fourth quarter of 2011.
Average production volume was $301 million per company in the first quarter, from $313 million per company in the fourth quarter of 2011. On a repeater company basis, average production volume remained constant at $314 million per company.
The refinance share of total originations, by dollar volume, was 58% in the first quarter, up from 57% in the fourth quarter of last year. For the mortgage industry as whole, the MBA estimates the refinancing share at 75% in the first quarter, down from 78% in the preceding quarter.
‘For independent mortgage bankers, average production volume and the purchase share of that volume remained relatively constant in the first quarter, compared to the previous quarter," says Marina Walsh, the MBA's associate vice president of industry analysis. ‘Independent mortgage bankers remained focused on purchase production while many larger banking institutions were handling significantly more refinancing activity. While per-loan production expenses increased, secondary marketing gains improved as primary-secondary spreads widened. Secondary marketing income rose from $4,355 per loan in the fourth quarter of 2011 to $5,011 per loan in the first quarter of 2012.’