Production profits rose during the second quarter amidst higher volumes and lower expenses, the Mortgage Bankers Association reported in its Quarterly Mortgage Bankers Performance Report.
During the second quarter, independent mortgage banks and mortgage subsidiaries of chartered banks recorded a $1,686 net gain for each originated loan in the second quarter. During the first quarter, the net gain per loan was much lower at $825.
"Production profits more than doubled in the second quarter of 2016, as production volume rose and expenses dropped to a level not seen since the third quarter of 2015," said Marina Walsh, MBA vice president of industry analysis, in a news release Tuesday. "Mortgage lenders also benefited from higher loan balances that reached a series-high of $245,394 and drove production revenue to a series-high of $8,807 per loan."
Additionally, the MBA reported that average production volume rose to $654 million and 2,721 loans per company in the second quarter from $517 million and 2,196 loans in the first quarter.
The situation was less peachy on the servicing side, though. Companies reported a $160 net loss per loan for servicing versus a net loss per loan of $118 a quarter earlier, as a result of mortgage servicing rights markdowns and amortization caused by elevated prepayments. With MSR amortization and gains and losses for servicing rights valuations excluded, servicing operating income was just $192 per loan versus $205 per loan in the first quarter.
