Mortgage Lenders Making Profit Again

Mortgage (3)

During the second quarter of 2014, mortgage lenders in the United States reported a net gain in their profit of $954 on each originated home loan. During the first quarter the lenders incurred loss of $194 per loan. The data is compiled by the Mortgage Bankers Association (MBA) in their Quarterly Mortgage Bankers Performance Report.

The average net production profit reached 45.70 basis points during the second quarter of the year. During the first quarter, the average production net loss reached a level of 8.31 points.

The increase during the second quarter of 2014 is the first after six consecutive quarters of decrease. During these six quarters, the costs of mortgage bankers were on the rise as well. Now the trend is reversed. The total loan production expenses fell to $6,932 per originated home loan from $8,025 during the first quarter of the year. This is the biggest drop in the total cost of originating a mortgage since the MBA began issuing the Quarterly Report in the first quarter of 2008.

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The net cost to originate a home loan experienced a decline as well. It was $5,074 during the second quarter of 2014. It dropped down from $6,253 in the first quarter of the year. This measure includes all expenses for mortgage production and operation plus commissions minus the total income from fees.

The average mortgage production volume per lender rose by 38% from the first to the second quarter of 2014. It reached $378 million from a level of $274 million. The average number of home loans originated by a mortgage lender went up from 1,238 during the first quarter to 1,676 during the second quarter. During the second quarter of 2014, the share of jumbo loans of the total volume of mortgage originations continued to rise and reached 7%. This is the largest share which jumbo loans have gained since the creation of the report.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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