Mortgage Bankers Saw ‘Less Severe’ Net Losses in Q1 


Mortgage bankers continued to lose on originations in the first quarter, as the average pre-tax net loss per loan was $645, according to the Mortgage Bankers Association’s (MBA) Quarterly Mortgage Bankers Performance Report.

That’s a decrease from the reported loss of $2,109 per loan in the fourth quarter of 2023.

“While the first quarter of 2024 marks the eighth consecutive quarter of net production losses, these losses were less severe than the previous two quarters,” says Marina Walsh, vice president of industry analysis for the MBA, in a statement. “In basis points, production revenue rose above the historical average and production costs declined. This led to an improvement in the production bottom line by almost 50 basis points during the quarter.

“Servicing profitability also improved, given low prepayment activity and preservation of servicing values,” Walsh adds. “Including both the production and servicing business lines, close to 60 percent of mortgage companies were profitable in the first quarter of this year – the highest level in eight quarters.” 

Including all business lines (both production and servicing), 59% of the firms in the report posted pre-tax net financial profits in the first quarter of 2024, up from 29% in the fourth quarter.

The average pre-tax production loss was 25 basis points in the first quarter, compared to an average net production loss of 73 bps in the fourth quarter.

The average quarterly pre-tax production profit, from the third quarter of 2008 to the most recent quarter, is 42 basis points, according to the report.

The average production volume was $384 million per company in the first quarter, up from $359 million per company in the fourth quarter.

The volume by count per company averaged 1,193 loans in the first quarter, up from 1,170 loans in the fourth quarter.

Per-loan production costs increased to $12,593 in the first quarter, up from $12,485 in the fourth quarter.

Photo: Bikram Sharma

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