WASHINGTON–Profits are up at independent mortgage brokers at banks, according to the Annual Mortgage Bankers Association Performance Report.
The MBA said its analysis of independent mortgage banks and mortgage subsidiaries of chartered banks showed an average of $157 more on average per loan originated in 2016 compared to 2015.
"Average production volume for companies in our Annual Performance Report rose in 2016, reflecting a larger industry trend of increasing volume in 2016 over 2015, based on MBA industry estimates," said Marina Walsh, MBA VP of Industry Analysis, in a statement accompanying release of the report. "Average loan balances also rose, reaching a study-high $244,945 for first mortgages in 2016. This translated into higher revenues that reached a study-high $8,555 per loan in 2016. Yet production expenses also reached a study-high, at $7,209 per loan, and offset a portion of these revenue improvements. The net result was a slight increase in overall net production income."
The MBA said it further found that average production volume was $2.6 million per company, another increase from 2016’s $2.5 million per company. According to the MBA, it is estimating that total production volume in 2016 to be $1.89 trillion, which is up from 2015’s $1.68 trillion.
Overall, the average production profit rose six basis points year-over-year, from 52 points in 2015 to 58 points in 2016. However, 2016 did see a slight drop within the year. Net production income averaged 61 basis points during the first half of 2016, but dropped to 55 in the second half of the year. The MBA said that the purchase share of total originations by dollar volume dropped slightly in in 2016, from 64% in 2015 to 62%.