Independent mortgage bankers are seeing increasing origination volumes and profits, according to a report released Thursday by the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA).[IMAGE]
""Both purchase volume and refinancing volume increased in the third quarter, resulting in higher net production profits among independent mortgage bankers,"" said Marina Walsh, associate VP of industry analysis at MBA.
Originations at independent mortgage banks increased in both dollar volume and in number of loans, according to MBA's calculations.
On average, independent mortgage banks and mortgage subsidiaries of chartered banks experienced an increase in production volume to $450 million in loans the third quarter. Average production volume in the second quarter was $371 million per company.
The number of loans originated per company increased from 1,700 in the second quarter to 2,010 in the third.[COLUMN_BREAK]
MBA also pointed out that refinances are making up an increasing share of independent bankers' origination volume. However, the share remains below that reported for the industry as a whole.
In the third quarter, refinances made up 57 percent of the dollar volume of loans originated at independent banks and mortgage subsidiaries of chartered banks. The second-quarter share was 52 percent.
In contrast, refinances made up 73 percent of loan origination dollar volume in the third quarter throughout the industry at large. This is an increase from 67 percent reported for the second quarter of this year.
While overall origination volume increased during the third quarter for independent mortgage banks, the profit per loan also rose. Independent mortgage banks profited $2,465 per loan origination in the third quarter, up from $2,152 per loan in the previous quarter.
Though profits per loan rose, so did the costs involved in originating loans.
Loan production expenses were up from $5,128 per loan in the second quarter to $5,163 per loan in the third quarter.
The ""net cost to originate"" a loan also increased from $3,224 per loan in the second quarter to $3,353 in the third.
Personnel expenses also increased, but productivity improved in the third quarter as well. The personnel costs associated with each loan produced in the third quarter was $3,320, up from $3,246 in the second quarter.
Individual originators produced 3.9 loans per month in the third quarter, up from 3.6 in the previous quarter.