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Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $4,548 on each loan they originated in the second quarter of 2020, up from $1,600 in the first quarter, according to the Mortgage Bankers Association.
“Fueled by a surge in borrower demand and record-low mortgage rates, mortgage production profits in the second quarter reached the highest level since the inception of MBA’s report in 2008,” said Marina Walsh, MBA’s vice president of industry analysis. “Production volume averaged over $1 billion per company, and there was an ideal combination of higher revenues and lower costs.”
Revenues rose by 57 basis points from the first quarter, while expenses improved by $844 per loan. Productivity also increased, reaching levels not seen since 2012.
These conditions, along with continued low mortgage rates, are likely why mortgage lenders’ profit margin outlook for the next