Independent mortgage bankers achieved origination profitability for the fourth consecutive period in the first quarter, but at the same time, costs increased as well, the Mortgage Bankers Association said.
IMBs and bank mortgage subsidiaries reported an average pretax net production profit of $727 per loan, compared with
But as measured in basis points, quarter-to-quarter origination profitability declined by 1 basis point to 16 from 17. For
These results occurred even as production volume declined from the fourth quarter, said Marina Walsh, MBA's vice president of industry analysis in a press release.
On a dollar basis, total industry volume of $551 billion for the period ended March 31 declined from $586 billion three months prior, the MBA's April forecast said. Units produced dropped to 1.46 million from 1.57 million.
Why did independent mortgage banker per loan results improve?
"Production costs grew by close to $800 per loan, but increases in production revenues offset these additional costs," Walsh explained.
Total production revenue, which consists of fee income, net secondary marketing income, and warehouse spread, rose to $12,626 per loan, up from $11,776 on a quarter-to-quarter basis. Basis points increased to 353 in the first quarter, up from 340 in the fourth quarter.
But as Walsh noted, the expense side of the equation also rose, to $11,898 per loan in the first quarter, up from $11,102 for the prior period.
On a historic basis, expenses remain elevated. Starting from the first quarter of 2008 through this March, loan production expenses have averaged $7,903 per loan.
The originators in this study did a higher share of purchase mortgages than the industry as a whole, 65% compared to 60%, according to MBA estimates.
The first lien mortgage average loan balance increased to $387,881 in the first quarter, up from $379,587 in the fourth quarter.
How mortgage servicing performed financially in the first quarter
IMBs had equally strong, positive results versus comparative periods on the servicing side as well.
"Servicing net income improved during the first quarter, as
Servicing net financial income of $77 per loan serviced, up from $13 in the fourth quarter, and from $22 for the same period in 2025.
Servicing operating income, which excludes servicing rights amortization and other valuation items, was $93 per loan in the first quarter, up from $90 per loan for both the fourth and first quarters of 2025.
Combining both production and servicing, 76% of lenders in the report were profitable in the first quarter.
"Still, disparities between the top and bottom performers remain wide," Walsh said.
