Nearly Three Quarters of Mortgage Lenders Report Profit

Seventy-four percent of lenders reported pre-tax profit in the fourth quarter of 2014. This is revealed in the Quarterly Mortgage Bankers Performance Report of the Mortgage Bankers Association. The share of profitable lenders rose from 58% in the final quarter of 2013, but declined compared to the third quarter when it was 83%.

The average net gain per mortgage loan also experienced an increase on an annual basis. It rose nearly five times to $740 in the fourth quarter of 2014 from $150 in the same quarter of 2013. On a quarterly basis, the average net gain per loan dropped down from $897 in the third quarter of 2014.

The average production profit in the final quarter of last year was 32 basis points. It climbed up from 9 basis points in the final quarter of 2013. It marked a drop on a quarter-to-quarter basis. In the third quarter of last year it was 42 basis points.

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The average mortgage production volume in the final quarter of 2014 was $417 million. It rose on an annual basis and declined on a quarterly basis. In the same quarter of 2013 it was $367 million. In the third quarter of 2014, it was $437 million. The volume per count followed the same pattern. On average, each mortgage lender produced 1,769 loans in the fourth quarter up from 1,641 one year ago and down from 1,901 in the third quarter.

The share of home purchase loan originations shrunk to 65% in the fourth quarter compared to 72% in the third quarter of 2014. For the entire industry, the Mortgage Bankers Association estimated a purchase share of 54%.
There was a slight increase in the total loan production expenses on a quarterly basis. They rose to $7,000 per mortgage loan from $6,769 in the previous quarter. The net cost to originate climbed up to $5,238 from $5,038.



Jessie Jessie is a corporate communications and public relations professional skilled in media relations, strategic communications, crisis and issues management, writing and editing. She excels in managing multiple, high-priority tasks and working in high-stakes environments. Jessie has more than 10 years experience writing editing both print and online content. She is a graduate of Illinois State University with a Masters degree in English and writing.


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