Earnings at independent mortgage banking firms plummeted more than 50 basis points on a quarter-over-quarter basis. Secondary marketing gains and expenses hurt income.
From Oct. 1, 2016, through the end of last year, average originations for independent mortgage bankers
and mortgages subsidiaries of banks were 2,971 loans for $0.730 billion.
Average production slipped from the third quarter, when 3,179 loans were closed for $0.787 billion, but rose from 2,265 loans for $0.538 billion in the fourth-quarter 2015.
Those findings were reported by the
Mortgage Bankers Association in its Quarterly Mortgage Bankers Performance Report Q4 2016. A one-year subscription to the data is available to MBA members for a $675, while it costs $1,125 for non-members.
A total of 353 companies participated in the latest survey. However, prior-quarter comparisons were based on just the 321 firms that participated in the third- and fourth-quarter 2016 surveys.
A total of 8.9 loans were closed per month by the average sales employee. Average volume was up from 8.1 loans in the third quarter and 7.0 loans in the fourth-quarter 2015.
Origination fees averaged 43.13 BPS during the fourth quarter of last year.
Origination fees were off from 43.96 BPS the prior period and 43.26 BPS a year prior.
At firms that closed less than $0.100 billion during the last quarter of last year, origination fees were around 59 BPS. The average dropped to 33 BPS at companies with more than $0.250 billion in production.
Total net production income plunged to 24 BPS in the most-recent three-month period from 75 BPS three months earlier. But income crept up from 22 BPS a year earlier.
Hurting income were secondary marketing gains, which fell to 180 BPS from 205 BPS in the third quarter.
“Secondary marketing income dropped as mortgage lenders wrestled with less favorable pricing and pipeline challenges,” MBA Vice President of Industry Analysis Marina Walsh said in an accompanying statement.
In addition, direct loan
production expenses jumped to 304 BPS from 279 BPS.
Retail lenders’ average net production income was 30 BPS, while the average was just 8 BPS at
firms where at least 75 percent of business was generated through the wholesale channel.
Net production income was less than 8 BPS at organizations with less than $0.050 billion in quarterly volume and 36 BPS at businesses that generated more than $0.250 billion in originations.
An average of 393 full-time production employees were on staff during the final quarter of 2016. Headcount increased from 388 people the previous period and 356 employees in the fourth quarter of 2015.
Personnel accounted for 212 BPS in expenses during the latest quarter.
