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Earnings Improve for Average Originator

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As average quarterly home loan production climbed at independent lenders, so did earnings. Mortgage bankers are closing more loans per employee. Firms that focus on either retail or wholesale originations earn more per loan than companies generating loans through both channels.

Independent mortgage bankers originated an average of 2,079 residential loans for $465.0 billion during the third quarter.

Business picked up from the second quarter, when an average of 1,742 mortgages were originated for $380.9 billion.

The statistics were reported by the Mortgage Bankers Association in its third-quarter 2012 Quarterly Mortgage Bankers Performance Report. The report costs $350 for MBA members and $600 for non-members.

MBA said data from 311 lenders were used in the report. However, the second- and third-quarter production numbers were based on firms that reported in both periods.

Including “repeater” business and production from companies that only reported in one period, volume was 2,010 loans for $450.1 billion in the third quarter. Fundings increased from 1,700 loans for $370.6 billion three months earlier and 1,114 loans for $236.7 billion a year earlier.

Monthly volume averaged 11.0 closings per sales employee, more than the 9.4 closed in the previous report and much better than the 7.8 average a year prior.

The average loans closed a month per production employee was 3.93, more than the second quarter, when there were 3.62 closings per employee, and the third-quarter 2011, when the number was 2.76.

Net production income worked out to 119.6 basis points during the latest period, better than 107.2 BPS in the prior period and soaring from just 66.4 BPS in the same period during 2011.

But when looking at just retail lenders net production income edged up to 122.8 BPS, while it jumped to 130.3 for wholesale lenders. Dragging down the net were companies that originated a mix of retail and wholesale, which earned just 108.7 BPS.

The most recent total reflected a negative 152.8 BPS in net loan production operating income, 1.4 BPS in net interest income and 271.1 BPS in secondary marketing income.

On a per-loan basis, loan origination fees slipped to $1,157 from the prior quarter’s $1,197. Fees were better a year prior at $1,309.

That worked out to about 55.7 BPS per loan in the latest period, a little less than the 58.4 BPS in the second quarter and 67.7 BPS in the third-quarter 2011.

Net interest income per loan was $25, less than $26 in the second quarter and also less than half the $60 per loan a year earlier.

Secondary marketing income grew to $5,793 per loan from $5,350 in the second quarter. The third-quarter 2011 saw $4,583 in net secondary marketing income.

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