Mortgage bankers’ average profits plummet in 2013

by Ryan Smith23 May 2014

Mortgage bankers’ average profits saw a dramatic drop between 2012 and 2013, though the Mortgage Bankers Association still termed last year’s performance “respectable.”

According to the MBA, mortgage bankers made an average profit of $1,242 on each loan they originated in 2013. That’s down from an average of $2,199 per loan in 2012.

“Full-year 2013 net production profits were respectable,” said Marina Walsh, MBA’s vice president of industry analysis. “In fact, they were the second highest recorded since inception of the Performance Report in 2008.  However, net production profits in the second half of 2013 were substantially lower than those in the first half of 2013.  While secondary marketing gains remained relatively strong throughout the year, per-loan production expenses escalated in the second half of 2013.”

Total loan production expenses averaged $5,948 per loan in all of 2013, up from 2012’s average of $5,137. But the 2013 average is deceptively low – in the first half of the year, average per-loan expenses were $5,743, but shot up to $6,539 in the second half.

Personnel expenses were also up, rising from $3,285 in 2012 to $3,910 in 2013. Productivity, meanwhile, was down, dropping from an average 3.7 loans originated per production employee per month in 2012 to just 2.6 in 2013. 

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