Chart of the Week
Every Friday, MBA's Chart of the Week provides commentary and analysis on a topic of interest for the industry. This comes from variety of data sources, including proprietary data from MBA's own surveys and studies, as well as from government agencies and other reliable sources of mortgage, housing, and economic data.
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Current Chart of the Week
Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a pre-tax net loss of 4 basis points (-$40 per loan) in the fourth quarter of 2024, a decrease from the net profit of 18 basis points ($701 per loan) in the third quarter of 2024, according to the Mortgage Bankers Association’s (MBA) newly released Quarterly Mortgage Bankers Performance Report.
Net production losses resumed in the fourth quarter of 2024 after two consecutive quarters of modest gains. This decrease marks the ninth quarter of net production losses in the past three years, albeit a much smaller loss compared to the fourth quarters of 2022 and 2023.
This Chart of the Week shows production profits since the fourth quarter of 2019. During this time, a study-high of 203 basis points was reached in the third quarter of 2020 and a study-low of -99 basis points was recorded in the fourth quarter of 2022, reflecting the cyclical nature of the mortgage business. Quarterly net production profits averaged 30 basis points and $832 per loan over the five-year timespan. Since inception of the Quarterly Performance Report series in the third quarter of 2008 to the most recent quarter, net production profits have averaged 41 basis points, or $931 per loan.
Definitional Note: Pre-tax net production income is defined as total revenues (fee income, secondary marketing income, value of capitalized servicing/servicing released premiums at origination and net warehouse spread) minus fully-loaded production costs (sales, fulfillment, production support and corporate costs), divided by production volume in dollars ($), multiplied by 10,000 for basis points, and divided by loan production count for dollars per loan.
- Marina Walsh, CMB ([email protected]); Jenny Masoud ([email protected])