A new report found that per-loan production earnings at the biggest lenders were a quarter higher than at small firms. The disparity reflects more closings per employee at the larger players. Across all firms, secondary marketing income was up over prior periods.
The average mortgage banker closed 866 residential loans in the second quarter, according to the Quarterly Mortgage Bankers Performance Report released Wednesday by the Mortgage Bankers Association. On a dollar basis, average quarterly production worked out to $174 million.
Volume rose from the first quarter’s 793 loans for $164 million. But business was off from 982 units for $197 million in the second-quarter 2010.
“Contrary to overall MBA industry data in which estimated production volume declined, the average firm in our study of independents and subsidiaries experienced volume growth,” MBA Associate Vice President of Industry Analysis Marina Walsh said in a statement. “The firms in our study were able to more quickly adjust to a purchase-focused mortgage market environment after a significantly refi-heavy fourth quarter of 2010.”
The findings were based on a survey of 310 mortgage banking firms. More than 70 percent of the surveyed companies were independent mortgage companies.
The average retail lender closed 777 loans for $160 million, while average production jumped to 1,203 loans for $256 million for wholesale lenders.
Per-employee production was 2.23 loans, not much different than 2.25 loans originated per employee in the first three months of this year. However, per-employee production was better at 2.99 loans in the second quarter of last year.
Lenders closed 6 loans a month per sales employee, while the number dropped to 2.2 per production employee. At bigger firms with in excess of $250 million in production, 9.4 loans were closed per sales employee and 2.4 loans per production employee versus 4.8 loans per sales employee and 2.0 loans per production employee at firms where originations were less than $30 million.
Lenders earned an average net of 33 basis points on production during the latest three-month period, better than the first quarter’s 20 BPS but not as good as the 49 BPS a year earlier. At smaller lenders, net production income was 25 BPS, while earnings shot up to 35 BPS at bigger lenders.
Net earnings reflected 210 BPS in net secondary marketing income — an improvement from 201 BPS three months earlier and 182 BPS a year earlier.
Loan originations fees averaged $1,417 per loan, while correspondent and broker fee income was $175 and other origination-related income was $540.
