The Real Deal Miami

U.S. mortgage production profits style=”colo

July 21, 2010 03:00PM

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 yesterday. 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