Refinance boom heralds profit increases for mortgage bankers

The increase in borrowers refinancing their loans has proven a boon to the mortgage industry. Mortgage bankers and their subsidies made an average of $1,358 on each loan originated during the second quarter of 2009, up from $1,088 per loan in the first quarter, according to the latest Performance Report from the Mortgage Bankers Association. Production volume grew to an average of $281 million per firm in the second quarter, more than double what it was in the fourth quarter of 2008. Coupled with falling expenses, the growth in production volume allowed many lenders to return to profitability: 96 percent of firms posted pre-tax net financial profits in the second quarter, up from 85 percent in the first quarter of 2009 and 53 percent in the fourth quarter of 2008. TRD