As independent mortgage bankers’ quarterly lending slowed, income tumbled. Impacting earnings were personnel and direct-production expenses.
Average mortgage originations during the three months that ended on March 31 at
independent home lenders were 2,005 loans for $0.470 billion.
Business tumbled compared to the final-three months of last year, when an average of 2,764 loans were closed for $0.679 billion.
It was also down from 2,196 loans funded for $0.517 billion in the first-three months of last year.
Those details and far more were revealed in the
Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report Q1 2017 which can be purchased online by MBA members for $675 and for $1,125 by non-members.
MBA derived the data from a survey of 342
independent mortgage banks and mortgage subsidiaries of chartered banks. However, comparisons with the prior quarter were based on just the 312 companies that participated in both the latest and fourth-quarter 2016 surveys.
Monthly production worked out to
1.67 loans per production employee and 5.0 loans per sales employee.
Average loan origination fees dipped to 46 basis points from 47 BPS three months earlier and 41 BPS one year earlier.
At firms that originated less than $0.050 billion during the most-recent period, origination fees average 49 BPS, while they dropped to 31 BPS at companies that closed more than $0.250 billion.
Total net production income
came to 7 BPS — plunging from 27 BPS in the fourth-quarter 2016 and plummeting from 33 BPS in the first-quarter 2016.
The sharp decline in income came despite that net secondary marketing income jumped to 324 BPS from 281 BPS the prior quarter. Hurting income was personnel expense, which rose to 256 BPS from 219 BPS, and direct loan production expenses, which
leapt to 366 BPS from 310 BPS.
First-quarter 2017 net production income was a loss of 26
BPS at lenders with less than $0.050 billion in quarterly originations and a profit of 28 BPS at companies with more than $0.250 billion in production.
Based on origination channel, net production income was 18 BPS at retail lenders, a 7-basis-point loss at companies that generate business through both the retail and wholesale channels, and a 23-basis-point profit at firms with at least three-quarters of originations generated through the wholesale channel.
Total production headcount averaged 388 employees. Staffing was down from 392 in the final quarter of last year but up from 339 employees in the first quarter of last year.
