Independent mortgage banks and mortgage subsidiaries of chartered banks made an average profit of
“Average production volume for companies in our Annual Performance Report rose in 2016, reflecting a larger industry trend of increasing volume in 2016 over 2015, based on MBA industry estimates,” said
“Average loan balances also rose, reaching a study-high
“Mortgage lenders with servicing portfolios experienced significant fluctuations in the valuation of their mortgage servicing rights related to corresponding interest rate fluctuations during 2016. Most servicers reported net servicing financial losses in the first half of the year, followed by recoveries by the end of the year.”
“Including both production and servicing operations, 94 percent of the firms in the study posted overall pre-tax net financial profits in 2016, from 92 percent 2015.”
Among the other key findings of MBA's Annual Mortgage Bankers Performance Report are:
Average production volume was
In basis points, the average production profit (net production income) was 58 basis points in 2016, compared to 52 basis points in 2015. In the first half of 2016, net production income averaged 61 basis points, then dropped to 55 basis points in the second half of 2016. Since the inception of the Annual Performance Report in 2008, net production income by year has averaged 55 bps (
The purchase share of total originations, by dollar volume, decreased slightly to 62 percent in 2016, from 64 percent in 2015. For the mortgage industry as whole, MBA estimates the purchase share also decreased slightly to 52 percent in 2016, from 54 percent in 2015.
The average loan balance for first mortgages reached a study-high of
Total production revenues (fee income, net secondary marking income and warehouse spread) were 366 basis points in 2016, compared to 359 bps in 2015. On a per-loan basis, production revenues were
Total loan production expenses – commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations – increased to
Personnel expenses averaged
Productivity was 2.4 loans originated per production employee per month in 2016, up from 2.2 in 2015. Production employees include sales, fulfillment and production support functions.
Net servicing financial income, which includes net servicing operational income as well as mortgage servicing right (MSR) amortization and gains and losses on MSR valuations, was
Including all business lines, 94 percent of the firms in the study posted pre-tax net financial profits in 2016, up from 92 percent in 2015. In the first half of 2016, 84 percent of reporting firms posted pre-tax financial profits, compared to 93 percent in the second half of 2016.
MBA's Mortgage Bankers Performance Report series offers a variety of performance measures on the mortgage banking industry and is intended as a financial and operational benchmark for independent mortgage companies, subsidiaries and other non-depository institutions. Of the 280 firms that reported production, 76 percent were independent mortgage companies and remaining 24 percent were subsidiaries and other non-depository institutions.
There are five performance report publications per year: four quarterly reports and one annual report. For media inquiries, contact