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The Mortgage Bankers Association (MBA) reported today in its quarterly Mortgage Bankers Performance Report that independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of $1,447 on each loan they originated in Q1 2015, a sizable increase from a reported gain of $744 per loan in the Q4 2014.
"Net production profits among independent mortgage bankers nearly doubled from the fourth quarter of 2014 and secondary marketing gains improved by 31 basis points over the fourth quarter, based largely on the increase in refinancing volume in the first quarter of 2015," said Marina Walsh MBA’s VP of Industry Analysis. "However, total production operating expenses per loan remained a challenge, rising to $7,195 per loan in the first quarter of 2015, from $7,000 per loan in the fourth quarter of 2014."
Origination costs in the first quarter are also higher in comparison to quarters with similar production volume within the past few years, Walsh said.
The performance report also found that average production volume was $473 million per company in the Q1 2015, up from $417 million per company last quarter. The volume by count per company averaged 1,917 loans in the first quarter, an increase from 1,769 loans last quarter.
The average loan balance for first mortgages grew to a study high of $242,791 in Q1 2015, from $233,655 in the fourth quarter, the MBA reported. The net cost to originate was $5,597 per loan this quarter, up from $5,283 in the fourth quarter.
The MBA also reported today that mortgage applications decreased 7.6 percent from one week earlier, according to its weekly Mortgage Applications Survey for the week ending May 29, 2015. This week’s results were adjusted due to the Memorial Day holiday.
The measure of mortgage loan application volume, also called the market composite index, decreased 7.6 percent on a seasonally adjusted basis from one week earlier, according to the survey. On an unadjusted basis, the index decreased 17 percent compared with the previous week. The refinance index also decreased 12 percent from the previous week. The seasonally adjusted purchase index decreased 3 percent from one week earlier, while the unadjusted purchase index decreased 14 percent and was 14 percent higher than the same week one year ago.
The refinance share of mortgage activity is at its lowest level since May 2014, dropping to 49 percent of total applications, from 51 percent the previous week, the MBA reports. The adjustable-rate mortgage (ARM) share of activity decreased to 6.1 percent of total applications.
Despite all of the negative activity related to loan applications, the MBA reported that the FHA’s share of total applications increased to 14.9 percent from 14.5 percent the week prior. Meanwhile, the VA share of total applications increased to 12 percent from 11.7, and the USDA share of total applications increased to 1 percent from 0.8 percent the week prior.
