Non-Bank Lenders Saw Profits Soar in 1Q

Non-bank mortgage lenders hit the ball out of the park in the first quarter of this year, reaping an average profit of $1,088 on each loan funded — a six-fold increase in profitability over the fourth quarter of 2008. A new report issued by the Mortgage Bankers Association shows that higher loan production and refinancing activity produced a remarkable turnaround for the 319 mortgage companies that responded to its survey. "It was a needed boost for the mortgage industry," said Marina Walsh, MBA associate vice president of industry analysis. Average loan production per company jumped to $214 million in first quarter, compared to $126 million in fourth quarter, as refinancings made up 66% of production. In addition, operating expenses on a per loan basis dropped due to the higher loan volume. The "net cost to originate" fell to $1,725 per loan in the first quarter, down from $2,324 in the fourth quarter.