Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net loss of $194 on each loan they originated in the first quarter of 2014, down from a reported $150 in profit per loan in the fourth quarter of 2013, the Mortgage Bankers Association (MBA) reported today in its Quarterly Mortgage Bankers Performance Report.
"The significant overall production volume decline in the first quarter hurt mortgage bankers," Marina Walsh, MBA’s vice president of industry analysis, said in a statement. "Purchase volume did not pick-up, while refinancing volume dropped and costs continued to rise. Given these conditions, companies that managed to break even in the first quarter should consider that a reasonable outcome."
In basis points, the average production loss was 8.31 basis points in the first quarter of 2014, compared with an average net production profit of 8.72 basis points in the fourth quarter of 2013. This marks the sixth consecutive quarter that production income has decreased.
Average production volume was $274 million per company in the first quarter of 2014, down from $367 million per company in the fourth quarter of 2013. The volume by count per company averaged 1,238 loans in the first quarter, down from 1,641 in the fourth quarter of 2013.
The purchase share of total originations, by dollar volume, was relatively flat at 68 percent in the first quarter of 2014. For the mortgage industry as a whole, MBA estimates the purchase share at 51 percent in the first quarter of 2014, from 47 percent in the fourth quarter of 2013.
Total loan production expenses – commissions, compensation, occupancy, equipment and other production expenses and corporate allocations – increased to $8,025 per loan in the first quarter, up from $6,959 in the fourth quarter of 2013. First quarter 2014 production expenses were the highest recorded in any quarter since the performance report was created in the third quarter of 2008.
Productivity was 1.7 loans originated per production employee per month in the first quarter, down from two loans in the fourth quarter of 2013.
