Morning Briefing: Independent mortgage banks’ profits surge

Independent mortgage banks’ profits surge… Foreclosures continued to fall in February… Why a barn door may be important to realtors…

Independent mortgage banks’ profits surge
The profits of independent mortgage banks and the mortgage subsidiaries of chartered banks surged in 2015. A report from the Mortgage Bankers’ Association shows that the lenders made an average profit of $1,189 in 2015, up from $747 per loan in 2014.

"Despite a drop in profits in the second half of the year compared to the first half, full-year 2015 net production profits were 52 basis points, 18 basis points higher year over year, with higher production volume," said Marina Walsh, MBA's Vice President of Industry Analysis. "Profits in 2015 were just below the annual average of 55 basis points since the inception of the Performance Report in 2008.”
The overall profits were driven by larger loan balances with the average up 7 per cent to $239,265 from $223,108 in 2014. 

The "net cost to originate" was $5,567 per loan in 2015, up from $5,200 in 2014. Productivity was 2.20 loans originated per production employee per month in 2015, up from 2.05 in 2014. 
 
Foreclosures continued to fall in February
The size of the foreclosure inventory dropped by 23.9 per cent in February and completed foreclosures were down 10 per cent compared to the same month in 2015.

CoreLogic’s report shows that there were 34,000 completed foreclosures in February 2016 while the inventory was 434,000 representing 1.1 per cent of all homes with a mortgage. A year earlier 1.5 per cent of mortgaged homes were in the foreclosure process.

Serious delinquencies (more than 90 days) dropped year-over-year by 19.9 per cent to 1.3 million homes; 3.2 per cent of all homes with a mortgage.

“Home price gains have clearly been a driving force in building positive equity for homeowners,” said Anand Nallathambi, president and CEO of CoreLogic. “Longer term, we anticipate a better balance of supply with demand in many markets which will help sustain heathy and affordable home values into the future.”
 
Why a barn door may be important to realtors
Realtors listing a home with a barn door, subway tiles or farmhouse sink can expect a shorter wait for a sale. That’s the finding of a Zillow poll which reveals that those are some of the key features that boost both speed of sale and selling price of homes.

Barn doors, most common in Phoenix, AZ according to Zillow Digs analysis, added more than 13 per cent to a home’s value and meant a sale 57 days faster than expected.

In Los Angeles, a shaker cabinet can add almost 10 per cent to the price and cut 45 days from the sale period; New York buyers are impressed by exposed brick and will pay 4.9 per cent more; while an extra 4 per cent can be added to the price of homes in Seattle with heated floors, those in Chicago with stainless steel and Dallas homes with granite!