The profits of independent mortgage banking firms soared in the second quarter thanks to higher loan production, lower costs and an increase in purchase money loans.
According to a new study from the Mortgage Bankers Association, firms on average saw their origination profits spike by 30% to 107 basis points.
The typical firm tracked by the trade group funded $371 million in home mortgages, a 23% improvement from 1Q.
“With the surge in production volume in the second quarter, net production profits among independent mortgage bankers increased, surpassing 100 basis points for the first time since inception of our [first] report in 2008,” said MBA associate vice president Marina Walsh.
In dollar terms, net production profits jumped from $1,654 in the first quarter to $2,152 in 2Q.
The second-quarter "
Half of second-quarter loan production involved loans to homebuyers, compared to 45% in the prior period. (Refis are running at 70% of overall fundings, according to the
About 36% of the originations involved low downpayment Federal Housing Administration, Department of Veterans Affairs and Rural Housing Service guaranteed loans, unchanged from the first quarter.
MBA estimates that in 2Q purchase money loans accounted for just 26% of originations. Many megabanks were—and still are—focusing on
