Banks Post Higher Profits off Each Loan
December 15, 2011
Banks are making more profits on each loan they originate — a 377 percent increase in just a six-month period, according to the Mortgage Bankers Association.
On average, mortgage banks made a profit of $1,263 for each loan they originated during the third quarter — that’s up from $575 per loan in the second quarter of 2011. In the first quarter, they made $346 per loan.
“Higher volume helped profitability as production costs were spread over a greater number of loans,” said Marina Walsh, MBA’s associate vice president of industry analysis. “Third quarter production expenses dropped on a per-loan basis as volume rose, although expenses remained high by historical standards when compared to other quarters with similar volume.”
Refinancings made up the biggest bulk of originations — by dollar volume it was 45 percent in the third quarter compared to 36 percent in the second quarter.
Source: “Mortgage Banks’ Profits on Originations Soar 377 Percent,” RISMedia (Dec. 14, 2011)
Modest Volume, Price Gains Seen Next Year
Updated: August 11, 2020