Mortgage Lender Profits, Pull-Through, and Production Improve in 2009
Independentrnmortgage bankers and subsidiaries had a dramatically better year in 2009 than thernone they had endured in 2008.</p
According to the Mortgage Bankers Associationrn(MBA)'s Annual 2009 Mortgage Bankers Production Survey released on Wednesday,rnprofits on the average loan originated last year rose to $1,135 from a dismalrn$305 in 2008. The increase was thernresult of lower production costs driven by a higher volume of loans, especiallyrnfor refinancing.</p
Productionrnexpenses declined to $3,685 per loan last year from 4,717 in 2008 whilernproduction income dropped to $4,820 from $5023. The average profit was 61.3rnbasis points compared to 15.4 basis points in 2008. </p
Mortgage subsidiaries of banks and thriftsrndid much better than independent mortgage originators, averaging 79.5 basisrnpoints per loan compared to 54.9 basis points for their independentrncompetitors.</p
“Production profits increased in 2009 overrn2008 as higher origination volumes, particularly in refinancing, reducedrnper-loan production expenses,” said Marina Walsh, MBA's Associate VicernPresident of Industry Analysis. “It was also clear bank and thriftrnsubsidiaries had an advantage over independent mortgage companies because ofrnlower loan officer compensation per loan and higher net interest spread due tornlower warehouse funding costs and the ability to keep loans in warehousernlonger.” </p
Thernreport also found that: </p<ul
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