Magazine article Mortgage Banking

Mortgage Bankers Saw Production Profits Climb in 3Q 2010

Magazine article Mortgage Banking

Mortgage Bankers Saw Production Profits Climb in 3Q 2010

Article excerpt

In a quarterly study of production profits, the Mortgage Bankers Association (MBA) found that in the third quarter of 2010, average production profits for independent mortgage banks and subsidiaries climbed to an average of $1,423 per loan. That was up notably from $917 per loan in profits in the second quarter.

MBA attributed the improved per-loan profits partly to higher secondary marketing gains, according to a press release. Secondary marketing gains jumped to $4,069 per loan in the third quarter from $3,455 per loan in the second quarter. MBA noted that the secondary marketing gains offset further increases in the cost to originate a loan.

"Treasury rates declined further during the third quarter of 2010, driving down mortgage interest rates, which caused those who were on the fence about refinancing to finally take the plunge," said Marina Walsh, MBA's associate vice president of industry analysis.

The study found a sharp rise in the refinance share of total originations in the third quarter for the sample studied. The share rose to 57 percent in the third quarter compared with just 35 percent in the second quarter of 2010. …

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