Scotsman Guide > News > Top Headlines > News Story

 Enter your e-mail address and password below.

  •  
  •  

Forgot your password? New User? Register Now.

Top Headlines

 
Subscribe icon Subscribe to our weekly e-newsletter, Top News.

Nonbank profits per loan sink in Q3


Nonbank mortgage profits continue to suffer as a result of the downturn in refinancing business, stiff competition for customers and higher costs, new tracking data suggests.

loanprofNonbanks realized a net gain of $480 per loan in the third quarter, the lowest amount for a third quarter since at least 2008, according to the Mortgage Bankers Association (MBA). The third-quarter per-loan profit was down from $580 per loan in the second quarter and from $929 per loan in the third quarter of 2017. The third-quarter net gain figure also was less than half of the average third-quarter profit of around $1,200 per loan since 2008, according to MBA.

“These are very challenging times for independent mortgage bankers,” said Marina Walsh, MBA’s vice president of industry analysis. “Profitability continues to be hindered by high costs and low productivity. We expect fixed costs to remain elevated, and competitive pressures will continue to hamper production revenues in the winter months. Therefore, mortgage-banker profitability will likely remain challenged.”

Average loan volumes dropped to $474 million per company, down from $531 million in the second quarter. In the third quarter of 2017, nonbanks averaged $569 million in loan volume. By mortgage count, companies averaged 1,948 loans, down from 2,180 loans in the second quarter and down from 2,341 loans in the third quarter of 2017.

Rising production costs and lower productivity also have been a big issue for nonbank lenders.

Total mortgage-production expenses increased to $8,174 per loan in the third quarter, up from $7,877 per loan in the second quarter. In the third quarter of 2017, the per loan expense was $8,060. Productivity declined to 1.9 loans originated per production employee, down from 2.1 loans this past second quarter and 2.1 loans in the third quarter of 2017.

One bright spot is servicing, which has remained profitable as a result of low delinquency rates and high loan balances.

“Including all business lines, both production and servicing, 71 percent of the firms in the study posted a pre-tax net financial profit in the third quarter,” Walsh said. “Without servicing, that percentage would have dropped to 52 percent.”


 

Questions? Contact at (425) 984-6017 or victorw@scotsmanguide.com.

Bubble 0 Comments

By submitting this comment, you agree to comply with our Terms of Use.



The text exceeds the maximum number of characters allowed.


Are you sure you want to permanently delete this blog comment? This action cannot be reversed.



You must enable your community profile to use this feature.

Cancel Enable profile

You have flagged this post for inappropriate content.

Please explain below. Thank you.

Cancel Submit

Get the latest news and articles from Scotsman Guide straight to your inbox.


Send me the following e-mails:





Learn more about Scotsman Guide e-mails

Thank you for signing up to receive e-mails from Scotsman Guide.

A confirmation e-mail has been sent to the address you provided.

For questions regarding your e-mail subscriptions please contact Circulation@ScotsmanGuide.com or call (800) 297-6061.


Fins A Lender Post a Loan
Residential Find a Lender Commercial Find a Lender
Follow Us:Visit Scotsman Guide Facebook pageVisit Scotsman Guide LinkedIn pageVisit Scotsman Guide g+ pageVisit Scotsman Guide Twitter page
 
 
 
 

 
 

© 2018 Scotsman Guide Media. All Rights Reserved.  Terms of Use  |  Privacy Policy