MBA: Origination Costs Fell 26% in '03

The net cost of originating a mortgage loan totaled $739 in 2003, 26% less than in 2002, according to the Mortgage Bankers Association.The MBA's 2004 Cost Study surveyed 190 mortgage companies to determine the income and costs associated with originating and servicing one- to four-unit residential loans. It found that mortgage banks with the highest average percentage of purchased production incurred the lowest net cost to originate, $480 per loan. The study also found that net income from warehousing declined to $516 per loan in 2003 from $522 in 2002. In addition, the study found that net secondary marketing income, including capitalized servicing, once again provided the largest contribution to the bottom line in 2003, at $1,528 per loan. Meanwhile, amortization of mortgage servicing rights accounted for $166 per loan in losses, according to the MBA study. The MBA can be found online at http://www.mortgagebankers.org.