WASHINGTON, DC – August 30, 2012 – (RealEstateRama) — Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of $2,152 on each loan they originated in the second quarter of 2012, up from $1,654 per loan in the first quarter, the Mortgage Bankers Association (MBA) reported today.
“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 report in 2008,” said MBA Associate Vice President of Industry Analysis Marina Walsh. “Secondary marketing gains improved by almost 14 basis points over the first quarter, the result of widening spreads between the primary and secondary markets. With the record volume, total production operating expenses also decreased by $164 per loan over the first quarter.”
Among the other key findings of MBA’s Quarterly Mortgage Bankers Performance Report are:
• In basis points, the average production profit (net production income) was 107 basis points in the second quarter, compared to 82 basis points in the first quarter.
• Average production volume was $371 million per company in the second quarter, up from $301 million per company in the first quarter. The average volume by count per company rose to 1,700 loans in the second quarter, from 1,380 in the first quarter.
• The purchase share of total originations, by dollar volume, was 48 percent in the second quarter, up from 42 percent in the first quarter. For the mortgage industry as whole, MBA estimates the purchase share at 26 percent in the second quarter of 2012, from 25 percent in the first quarter.
• Measured in basis points, secondary marketing income increased to 257 basis points in the second quarter, compared to 243 basis points in the first quarter.
• Personnel expense decreased to $3,246 per loan in the second quarter, compared to $3,350 per loan in the first quarter.
• Total production operating expenses – commissions, compensation, occupancy and equipment, and other production expenses and corporate allocations – decreased to $5,128 per loan in the second quarter, from $5,292 in the first quarter.
• The “net cost to originate” was $3,224 in the second quarter, down from $3,413 per loan in the first quarter. The “net cost to originate” includes all production operating expenses and commissions minus all fee income, but excludes secondary marketing gains, capitalized servicing, servicing released premiums and warehouse interest spread.
• Productivity improved to 3.6 loans originated per production employee per month in the second quarter, from 3.3 in the first quarter.
• 95 percent of the firms in the study posted pre-tax net financial profits in the second quarter of 2012, compared to 93 percent in the first quarter.
MBA’s Mortgage Bankers Performance Report series offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, bank subsidiaries and other non-depository institutions.
72 percent of the 305 companies that reported production data for the second quarter report were independent mortgage companies.
There are five performance report publications per year: four quarterly reports and one annual report. For media inquiries, contact Matt Robinson at (202) 557-2727 or 
To purchase or subscribe to the publications, call (202) 557-2879. The reports can also be purchased on MBA’s website by clicking here.
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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mortgagebankers.org.
