MBA predicts more founding losses to come

back Improvement for two consecutive periodsThe Mortgage Bankers Association said losses per loan increased quarter by quarter as fees increased but transaction volumes fell.

This marks Origin’s sixth consecutive quarter of losses, and given expected sales trends, more losses are likely in the near term.

IMB’s average loss per loan was $1,015 (or 34 basis points), up from $534 (18 basis points) and $624 (20 basis points) per loan in the second quarter Season 3, 2022. At the time, losses for the same period last year were the highest since 2008, but the highest in both industries. Q4 and Q1 2022 This year’s.

Marina Walsh, vice president of industry analysis at MBA, said: “The decline in origin volumes exacerbated net production losses in the third quarter of 2023. While production revenue remained relatively flat, production costs per loan returned to the third highest level in the MBA survey. Historically, the survey reversed some of the cost improvements in the second quarter.”

reiterate what she said In a speech at the MBA Annual Meeting Walsh noted in Philadelphia that things may not get better until the second quarter of 2024.

The portfolio of servicing rights is a key factor in the profits and losses of some non-bank institutions.

“Combining the production and servicing business lines, about half of mortgage companies remained profitable in the third quarter of 2023. Without mortgage servicing, only about a third of companies would have been profitable,” said Walsh.

However, 51% said they made a profit last quarter, down from 58% in the second quarter.

While revenue per loan produced was only $84 lower than the previous quarter, or $10,426, compared with $10,510 the prior quarter, expenses increased $397, from $11,044 to $11,441.

Starting in the third quarter of 2008, the historical average fee per loan was $7,305.

In terms of servicing activities, IMB reported net finance income per loan (not annualized) of $90 in the third quarter, down from $94 in the second quarter. This figure includes amortization, Gains and losses on MSR value net of hedging and any gain or loss on the sale of a large portfolio.

Without these items, servicing operating income per loan in the third quarter was $104, down from $105 in the second quarter.

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