Magazine article Mortgage Banking

MBA Study Finds Production Profits Fell in 4Q 2011

Magazine article Mortgage Banking

MBA Study Finds Production Profits Fell in 4Q 2011

Article excerpt

The Mortgage Bankers Association (MBA) reported average profit per loan dropped in the fourth quarter of 201 1 to $1,093 for participants in its quarterly Mortgage Bankers Performance Report. That was down from average profit in the third quarter of $1,263 per loan.

Of the 300 companies in the study, 72 percent were independent mortgage companies, MBA said.

MBA also found the net cost to originate dropped modestly in its fourth-quarter findings. The perloan net cost to originate was $3,324 in the fourth quarter, down slightly from the third quarter's $3,360.

The share of companies posting pre-tax net financial profits in last year's final quarter also dropped, going from 86 percent in the third quarter to 78 percent in the fourth.

The weaker performance came in spite of stronger origination volume in the fourth quarter, which was driven by heavier refinancing. MBA reported that average production volume for the study's participants was S313 million per company in the fourth quarter. That was up from $237 million per firm in the third quarter. …

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