Independent mortgage bankers have seen their per-loan income steadily decline over the past year but in the third quarter profitability took a steeper dive.
The average profit was $743 per loan, compared to $1,528 in 2Q, the Mortgage Bankers Association reported Tuesday.
“Third-quarter profits were reduced by half because of several factors: per-loan production expenses that reached survey highs, declining production volume and reduced secondary marketing income,” says Marina Walsh, MBA’s associate vice president of industry analysis.
Total loan production expenses including commissions, compensation, equipment and other production expenses increased to $6,386 in 3Q, up from $5,818 in 2Q.
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“Historically, mortgage bankers have struggled to control fixed costs and right-size in a declining market, and the increasing costs of compliance and quality control only exacerbate an already difficult situation,” Walsh says.
