Mortgage bankers saw average return on loans fall in the first quarter

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Mortgage bankers made a net profit of $ 3,361 on each loan issued in the first quarter, up from $ 3,738 in the fourth quarter of 2020, according to data Mortgage Bankers Association (MBA) shows.

The average operating profit before tax was 124 basis points (basis points), lower than the average net operating profit of 137 basis points in the fourth quarter of 2020, but higher on an annualized basis from 61 basis points in the first quarter. 2020.

“Despite a slight decline from the fourth quarter of 2020, net operating income reached its highest level in any first quarter since the publication of the MBA report in 2008,” says Marina Walsh, CMB, VP of MBA Industry Analysis, in the most recent report. Mortgage Banks Quarterly Performance Report… “Three-digit baseline profitability was recorded for the fourth straight quarter, another record that surpasses the 2012 boom of the Home Affordable Refinance Program (HARP).

“Average production also declined from the previous quarter, but was still the highest in any first quarter as average loan balances continued to rise,” adds Walsh. “Manufacturing revenues fell again after peaking in the third quarter of 2020, and while manufacturing costs rose slightly, the rate of growth is slower than in the previous two quarters.”

Walsh also noted that there was a more significant improvement in net financial profit from servicing thanks to the restoration of the mortgage servicing rights (MSR) valuation.

Combining manufacturing and service operations, 97% of firms posted overall profitability in the first quarter.

Total operating expenses on the loan — commissions, compensation, placement, equipment and other operating expenses and corporate appropriations — increased to $ 7,964 per loan in the first quarter from $ 7,938 in the fourth quarter.

Staff costs averaged $ 5,523 per loan, up from $ 5,426 in the fourth quarter.

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