Lower Profit for Independent Mortgage Bankers

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The net gain on each mortgage loan originated by independent mortgage banks and chartered banks’ mortgage subsidiaries in the third quarter of 2014 was $897. It experienced a decline compared to the second quarter of the year when it was $954. This was reported by the Mortgage Bankers Association in its Mortgage Bankers Performance Report for the third quarter of the year.
In the third quarter, the average production profit was 42 basis points. It dropped down from 46 basis points in the previous quarter.

The average mortgage production volume per company rose by 16% in the third quarter of 2014 compared to the second quarter of the year. It increased to $437 million from $378. On average, a company originated 1,901 mortgage loans in the third quarter. In the second quarter, the average number of loan originations was 1,676.

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The share of home purchase loans in the total origination volume dropped to 72% in the third quarter from 74% in the second quarter. The estimated share of home purchase loans in the entire industry is 62%. The share of jumbo loans in the total volume of first mortgage originations rose to its highest level since the third quarter of 2008 when the report was first produced. It reached 9.4%.

The average first mortgage balance rose to $231,914 in the third quarter from $225,762 in the previous quarter. It reached its highest level since the third quarter of 2008.
The secondary market income dropped to 261 basis points from 270 basis points in the second quarter.

The total expenses of mortgage production decreased to $6,769 in the third quarter from $6,932 in the previous one.
Marina Walsh, Vice President of Industry Analysis in the MBA, commented that the higher mortgage production volume resulted in nominal decrease of the production expenses per loan. She explained that the decrease in profit was due to the drop in secondary marketing income.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. 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.

Contact: christian@mortgage.info
Christian

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