Home loans originated by the average independent mortgage banker were stronger during the latest quarter, though same-store sales were little changed over the last three months and year. As the refinance storm has maintained strength, lenders are getting more out of production personnel and out of their wallets.
The average independent mortgage firm originated 1,700 loans for $371 million in the second quarter. Average production was up from 1,380 loans originated for $301 million during the first quarter — though the prior-period data was little changed when only comparing activity at firms that participated in both quarters.
In the same quarter last year, an average of just 866 loans was originated for $174 million. But for just companies that participated both in the latest study and the previous period, year-earlier production was 1,432 loans for $312 million.
The Mortgage Bankers Association outlined the results in its Quarterly Mortgage Bankers Performance Report for the three months ended June 30, 2012. Performance data was submitted by 313 independent mortgage banks and mortgage subsidiaries of chartered banks. Seventy-two percent of the participating firms were independent mortgage companies.
An average of 205 full-time employees were on staff at the typical firm participating in the latest survey, more than the 186 headcount average in the first quarter and 164 in the second quarter of last year. This year’s second quarter total reflected 91 average sales employees, 69 fulfillment employees and 44 other production-related employees.
The average sales employee closed 9.4 loans per month in the second quarter, a little better than the 9.1 average in the prior period and 6.0 in the same period during 2011.
Average loans closed per production employee were 3.62 a month, better than the first quarter’s 3.34 number and the year-earlier average of 2.23.
Net production income totaled 107 basis points per loan, improving from 82 BPS in the first quarter and 33 BPS in the second-quarter 2011. The total reflected negative net loan production operating income of 151 BPS, net interest income — the difference between warehousing income and warehousing expense — of 1 basis point and net secondary marketing income of 257 BPS.
“With the surge in production volume in the second quarter, net production profits among independent mortgage bankers increased, surpassing 100 basis points for the first time since inception of our report in 2008,” MBA Associate Vice President of Industry Analysis Marina Walsh said in an accompanying announcement.
Lenders earned 93 BPS in production revenues on the average loan, off from 95 BPS three months earlier and 114 BPS a year earlier. The most-recent total included 58 BPS in origination fees, 9 BPS in correspondent and broker fee income and 26 BPS in other origination income.
Loan production expenses slipped to 244 BPS from 259 BPS in the prior survey and 295 BPS in the year-earlier report. Second-quarter expenses included 154 BPS in human resource expense and 14 BPS in corporate allocation, among other items.
