U.S. mortgage production profits decline in 1Q

Profits on mortgage loans declined in the first quarter of the year
for independent U.S. mortgage bankers and their subsidiaries, according
to a report from the Mortgage Bankers Association, released today. The
average profit per loan was $606 during the three-month period, down
from $890 in the fourth quarter of 2009 and from $1,088 one year
earlier, the report says. The report attributes the fall in profits to
increased operating expenses — up 17 percent-per-loan from the fourth
quarter — and declining production volumes — down by an average of 27
percent for each firm from the fourth quarter. “It is extremely
difficult for mortgage companies to effectively manage staffing
levels,” said Marina Walsh, associate vice president of industry
analysis at the MBA. “Either companies are stretching to meet the
incredible demand, or they are carrying excess capacity which drives up
per-loan personnel expense.” TRD