Although mortgage production picked up at independent lenders during the second quarter, per-loan earnings were lower and per-employee originations slacked off. Smaller firms earned more per loan, but larger lenders closed more units per employee.
Average residential loan originations at independent mortgage companies were 2,032 units for $463 million during the second quarter.
Home loan volume grew from the first quarter, when average mortgage production per company was 1,880 loans for $427 million.
The results were discussed in the Quarterly Mortgage Bankers Performance Report Q2 2013 from the Mortgage Bankers Association and were derived from a survey of 329 independent mortgage companies.
First- and second-quarter comparisons were based on just the 298 companies that participated in surveys during both periods.
Average volume was also up from 1,700 loans for $371 million in the second-quarter 2012. Year-earlier data was based on all 305 firms that were surveyed during that period.
Monthly volume worked out to 2.97 loans per production employee, not as good as the 3.13 average loans closed in the first quarter or the 3.62 loans closed per production employee one year prior.
Just based on sales staffing, monthly volume worked to 7.7 loans per employee, worse than the prior period’s 8.9 loans per sales employee and the second-quarter 2012’s 9.4 loans per employee.
Average production per sales employee ranged from 6.9 loans to 7.9 loans per month at companies that closed no more than $1 billion during the quarter, while it leapt to 11.1 loans at companies with more than $1 billion in production.
For lenders that only originate through retail loan officers, average monthly closings per sales employee were 6.8 loans, while the average jumped to 18.4 loans per sales employee at companies that generate at least 75 percent of their business through the wholesale channel.
Independent lenders earned an average of 49 BPS on each loan in origination fees, the same as three months earlier but less than the 58 BPS earned 12 months earlier.
But origination fees jumped past 75 BPS at firms that generated no more than $100 million in quarterly production, fell below 46 BPS at companies that originated more than $100 million and dropped to just 27 BPS at lenders that closed more than $1 billion.
Correspondent and broker fee income worked out to 4 BPS, off from the prior quarter’s 6 BPS and the 9 BPS in the second quarter of last year.
Other origination-related income was unchanged from the first quarter at 22 BPS but less than 26 BPS in the same three months of 2012.
Average production staffing grew to 271 employees from 251 employees three months earlier and 205 people a year earlier. The most recent headcount figure included 110 sales employees, 104 fulfillment employees and 58 other production-related employees.
Lenders spent 171 BPS per loan on personnel expenses, less than the 175 BPS in the first quarter but worse than the 154 BPS in the second-quarter 2012.
Net loan production operating income was a loss of 186 basis points versus a 189-basis-point loss in the previous period. A year prior, the loss was 151 BPS.
However, lenders earned 259 BPS in net secondary marketing income, though that wasn’t as good as the first quarter’s 273 BPS. But it was better than the 257 BPS in the same period last year. The latest quarter reflected 158 BPS in secondary marketing gains, 105 in capitalized servicing-released premiums and a negative 3 BPS in repurchase reserve provisions.
Net interest income, the difference between warehousing income and warehousing expense, jumped to 1.44 BPS from the first quarter’s 0.30 BPS and the year earlier’s 1.20 BPS.
Factoring in income from all three categories, total net production income fell to 75 BPS in the second quarter from 85 BPS and was also down from 107 BPS in the same period in 2012.
On a dollar basis, income dropped to $1,547 per loan versus $1,762 in the prior period and $2,152 in the year-earlier period.
At companies the originated less than $50 million, net production income was 81 BPS, while it was between 74 and 77 BPS for companies that funded between $50 million and $1 billion and 69 BPS at firms that generated more than $1 billion in originations.
