The mortgage bonanza that was during the second quarter ran out of steam in the third quarter, according to a survey of independent mortgage bankers from the MBA.
Average production volume slipped 33 percent between the second and third quarter as refinancing slowed, cutting into profits in the process.
Independent bankers and their subsidiaries saw average loan production of $189.6 million, compared to $280.9 million in the second quarter.
The firms made an average profit of $902 per loan originated, down from $1,358 a quarter earlier.
The net cost to originate climbed to $1,950 from $1,295 per loan, while production operating costs increased to $4,376 from $3,581 per loan.
“Production profits were still healthy in the third quarter of 2009, although not at the same level that we saw in the second quarter,” said Marina Walsh, MBA’s Associate Vice President of Industry Analysis.
“The overall decline in production volume combined with a heavier purchase share resulted in higher per-loan production expenses, which pulled down production profits.”
Refinancing accounted for just 44 percent of total originations during the third quarter, down from 62 percent a quarter earlier, but well above the 32 percent-share seen a year ago.
Average pull through (the number of closings divided by the number of loan applications) remained fairly steady at 72 percent, down from 73 percent a quarter earlier.
And retail loan officers averaged 6.7 closings per month during the quarter, compared to 11 in the previous quarter.
Related Topics:
