Thanks to a growing refinancing boom that gathered steam in the third quarter, small mortgage banking companies benefited as their profits per loan more than doubled during the period.
According to new figures compiled by the Mortgage Bankers Association, mortgage firms, on average, earned $1,263 per loan, compared to $575 in the second quarter.
The 318 lenders that participated in the MBA study funded, on average, $237 million of loans in 3Q, a 36% increase from the second quarter.
"At the same time, secondary marketing income rose from $4,006 per loan in the second quarter to $4,563 per loan in the third quarter," said Marina Walsh, MBA's associate vice president of industry analysis.
While higher loan originations reduced per loan production expenses, "expenses remained high by historical standards when compared to other quarters with similar volume," she said.
The quarterly profit report offers market share numbers on FHA, GSE and non-conforming loan programs. In the third quarter, Fannie Mae/Freddie Mac loans comprised 59% of total production, compared to 53% in the second quarter.
The FHA share dropped to 36%, from 41% in the second quarter.
