Driven by a record three-month loss in the fourth quarter, independent mortgage bankers last year had
These lenders, along with bank mortgage subsidiaries, lost an average of $1,056 on each loan they originated in 2023, compared with an average loss of $301 per loan the prior year.In all four quarters last year, IMBs lost money on their production, including a
Expenses rose to $11,258 per loan, which is also the most since the MBA started its study 15 years ago. For 2022, expenses averaged $10,624 per loan.
On average, lenders lost 37 basis points per loan in 2023 compared to 13 basis points in 2022.
"Mortgage market conditions were challenging last year because of
Many firms
"Some companies were able to weather the storm through cash reserves built up in the second half of 2019 through 2021," Walsh continued. "Companies also benefited from mortgage servicing cash flows that remained strong in an environment of low delinquencies and low prepayments."
However,
Net servicing financial income — made up of operational income, MSR amortization, plus gains and losses on MSR valuations — was $263 per loan in 2023, down from $586 per loan in 2022.
Since the report started in 2008, annual net production-income by year has averaged 49 basis points or $1,117 per loan.
Inclusive of all segments, 36% of the companies that participated in the MBA's study posted pre-tax net financial profits in 2023, down from 53% in 2022.
