Independent
mortgage
banks
(IMBs)
and
mortgage
subsidiaries
of
chartered
banks
lost
an
average
of
$1,056
on
each
loan
they
originated
in
2023,
down
from
an
average
loss
of
$301
per
loan
in
2022,
according
to

data
released
Thursday
by
the


Mortgage
Bankers
Association
(MBA).

This
was
the
largest
loss
recorded
in
the
15
years
that
MBA
has
tracked
production
data.

“Mortgage
lender
financial
results
worsened
in
2023
with
the
average
net
production
loss
moving
to
37
basis
points
from
losses
of
13
basis
points
in
2022.
And
although
production
revenues
stabilized,
costs
escalated
to
a
study
high
$11,258
per
loan,”
Marina
Walsh,
MBA’s
vice
president
of
industry
analysis,
said
in
a
statement. 

“Mortgage
market
conditions
were
challenging
last
year
because
of
higher

mortgage
rates,
low

housing
inventory,
and
weaker
housing
affordability.
These
factors
resulted
in
a
further
decline
in
volume,
compounding
the
precipitous
drop
in
2022.
Many
companies
were
still
chasing
cost
containment
and
personnel
reduction
throughout
the
year.”

MBA’s
Annual
Mortgage
Bankers
Performance
Report
records
a
variety
of
measures
on
the
mortgage
banking
industry
and
is
intended
as
a
financial
and
operational
benchmark
for
IMBs.

On
average,
production
volume
was 
$1.9
billion
(6,021
loans)
per
company
in
2023,
down
from
$2.6
billion
(8,371
loans)
per
company
in
2022.
Additionally,
the
refinancing
share
of
total
originations
by
dollar
volume
decreased
to
11%
in
2023,
down
from
20%
in
2022.
The
average
loan
balance
for
first
mortgages
reached
$331,437
in
2023,
up
from
$323,780
in
2022.

“Some
companies
were
able
to
weather
the
storm
through
cash
reserves
built
up
in
the
second
half
of
2019
through
2021,”
Walsh
added.
“Companies
also
benefited
from
mortgage
servicing
cash
flows
that
remained
strong
in
an
environment
of
low
delinquencies
and
low
prepayments.
However,
most
of
the
valuation
mark-ups
on
mortgage
servicing
rights
were
taken
in
2022,
resulting
in
lower
net
servicing
financial
income
in
2023.”

Total
production
revenues
—
including
fee
income,
net
secondary
marking
income
and
warehouse
spread
—
fell
to
329
basis
points
in
2023,
down
from
333
basis
points
in
2022.
Put
another
way,
production
revenues
were
$10,202
per
loan
in
2023,
compared
to
$10,322
per
loan
in
2022. 

Total
loan
production
expenses
(including
commissions,
compensation,
occupancy,
equipment,
and
other
production
expenses
and
corporate
allocations)
increased
to
$11,258
per
loan
in
2023,
up
from
$10,624
in
2022. 

Net
servicing
financial
income
also
slumped
during
the
past
year.
Net
servicing
operational
income,
as
well
as
mortgage
servicing
right
(MSR)
amortization
and
gains
and
losses
on
MSR
valuations,
represented
a
gain
of
$263
per
loan
in
2023,
down
from
a
gain
of
$586
per
loan
in
2022.

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