The average loan originator upped individual production during the final three months of last year, as did the average mortgage banker. While warehousing income has been on the rise, overall earnings per loan stumbled on a quarter-over-quarter basis. Loan origination fees on bigger loans were actually less than fees on smaller loans.
Fourth-quarter 2011 residential loan originations averaged 1,431 mortgages for $312.5 million per mortgage firm.
Volume jumped from the third-quarter average of 1,114 loans for $236.7 million and from the 1,296 loans closed for $285.8 million in the fourth-quarter 2010.
The findings were outlined in the Quarterly Mortgage Bankers Performance Report Q4 2011 from the Mortgage Bankers Association. The report costs $650 for MBA members and $1,100 for non-members.
Three-hundred lenders participated in the latest survey, down from 311 three months earlier and 310 a year earlier. The report reflects activity from independent firms and excludes huge companies like Bank of America Corp. and JPMorgan Chase & Co.
The average sales employee closed 9.8 loans per month. Production improved from the third quarter’s 7.8 in monthly closings and from 9.6 mortgages originated per sales employee in the final three months of 2010.
Fourth-quarter closings per total production employee were 3.46 loans per month. That number was 2.76 in the prior period and 3.79 during the same period a year prior.
On a dollar basis, fixed-rate government loans accounted for around 32 percent of fourth-quarter production, while fixed-rate prime conforming business represented 61 percent and fixed-rate jumbo loans made up 2 percent.
Nearly 81 percent of fourth-quarter volume was originated by retail or direct-marketing channels. Mortgage brokers and correspondent clients generated the rest.
Refinance share jumped to 57 percent from 45 percent but fell from 63 percent in the fourth-quarter 2010.
Loan-to-value ratios in excess of 80 percent were applicable on 44 percent of fourth-quarter 2011 production. The average LTV slipped to 78 percent from 80 percent but inched up from 77 percent one year previous.
FICO scores averaged 736 in the latest report, not much different than prior periods.
Almost all loans were originated for sale, as has been the case for a while.
The average lender earned 58.49 basis points in total net production income, worsening from 66.37 BPS in the third quarter. Earnings picked up, however, from 54.07 BPS earned in the fourth-quarter 2010.
The latest quarter consisted of a negative 160 BPS in net loan production operating income, 3 BPS in net interest income and 215 BPS in net secondary marketing income.
Loan origination fees amounted to $1,137 per mortgage, diminishing from $1,309 in the previous quarter and $1,443 in the same quarter during the previous year.
But on loans above $250,000, average origination fees were only $882, while they climbed to $1,519 for loans between $50,000 and $100,000.
Correspondent and broker fees grew to $148 per loan from $113 and were also better than $143 in the same period a year prior.
Including the cost of sales people, total personnel expense was $3,226 per loan. The cost was trimmed from the previous quarter’s $3,317 but grew from $3,124 in the same quarter in 2010.
Net secondary marketing income was $4,355 per loan, down from the third quarter’s $4,563 but better than $3,870 earned per loan in the fourth-quarter 2010.
Warehousing income averaged $465 per loan during the latest period, while warehousing expense was $403, leaving a net of $62. Net warehousing income was up from $60 in the prior quarter and $39 a year prior.
