We Lost for You to Gain
Nonbanks lost money originating mortgages so far this year, as per-loan profitability plunged into negative territory for just the second time in a decade, the Mortgage Bankers Association (MBA) recently reported. Regardless, we are here to see you to get into your dream home!
Nonbanks reported a net loss of $118 per loan, down from a gain of $237 in the fourth quarter, the trade group said. The cause of this year’s loss was lower mortgage volume.
In the first quarter of 2018, falling volume drove net production profitability into the red for only the second time since the inception of our report in the third quarter of 2008,” said Marina Walsh, MBA’s vice president of industry analysis.
“While production revenues per loan actually increased in the first quarter, we also reached a study-high for total production expenses at $8,957 per loan, as volume dropped.”
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Walsh said the losses were somewhat offset by increased servicing revenue.
Overall production expenses rose into new record territory. Total expenses increased by $482 per loan over the quarter to $8,857 per loan. Production expenses per loan were $2,733 higher in the first quarter of this year than the long-run average expense of $6,224 going back to 2008, the trade group said.
Driven by a sharp drop in rate-term refinancing activity, MBA is forecasting that overall mortgage volume will end the year down this year, clocking in at around $1.6 trillion, which is down about 6 percent from 2017.
On a positive hopeful note, home-purchase loan volume is anticipated to gain about 5 percent, to $1.17 trillion, according to MBA’s most recent forecast. Now is the time to buy, stop renting and allow Land Home Financial to assist you with the right product.