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Q2 Profits Rise for Independent Mortgage Bankers, Originators

Independent mortgage bankers and originators saw their profits rise over the second quarter, according to the ""Mortgage Bankers Association"":http://www.mbaa.org/default.htm (MBA).

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The trade group released a statement on Thursday that found independent mortgage banks and subsidiaries clinching $2,152 on average for every loan from the second quarter. That's an increase from $1,654 per loan from the quarter before.

Net production income shot up by 107 basis points, a leap from 82 basis points from the first quarter, helping increase second-quarter production volume to $371 million per company, up from $301 million.

Total purchase share for originations climbed by 48 percent over the second quarter, a rise from 42 percent during the first quarter.

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The MBA said that it believes the purchase share arrived at 26 percent in the second quarter this year, up from 25 percent from the first quarter.

Secondary marketing income picked up by 257 basis points over the second quarter, an increase from 243 basis points from the first.

Income and production figures also rose while operating and personnel expenses slowed down. For example, personnel expenses declined to $3,246 per loan over the second quarter, with dollar amounts for commissions, compensation, and equipment meanwhile declining to $5,128 per loan, down from $5,292 from the first quarter.

Net costs for origination s fell from $3,413 per loan from the first quarter to $3,225 by the second quarter.

In other good signs for the industry, productivity ticked up to 3.6 loans per employee per every month over the second quarter. Ninety-five percent of the firms from the study yielded pre-tax net financial profits, according to the MBA.

""With the surge in production volume in the second quarter, net production profits among independent mortgage bankers increased, surpassing 100 basis points for the first time since inception of our report in 2008,"" ""Marina Walsh"":http://www.mortgagebankers.org/files/SpeakersBureau/WalshMbio.pdf, associate VP with the MBA, said in a statement.

She said that ""[s]econdary marketing gains improved by almost 14 basis points over the first quarter, the result of widening spreads between the primary and secondary markets. With the record volume, total production operating expenses also decreased by $164 per loan over the first quarter.""

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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