“Production
profitability
was
close
to
break-even
in
the
first
quarter
of
2025
despite
a
decline
in
volume
and
an
increase
in
production
expenses,”

Marina
Walsh,
MBA’s
vice
president
of
industry
analysis,
said
in
a
statement.
“Production
revenues
increased
at
about
the
same
pace
as
costs,
which
mitigated
losses.”

Across
their
origination
and

servicing
channels,
58%
of
the
firms
in
the
report
posted
pretax
net
profits
in
Q1
2025,
down
from
61%
in
Q4
2024.

Lenders
with
lower
production
volumes
continued
to
struggle
the
most,
according
to
Walsh.
Companies
with
less
than
$100
million
in
volume
posted
average
losses
of
$1,000
per
loan
in
Q1
2025,
while
those
with
average
loan
balances
below
$250,000
recorded
production
losses
of
more
than
$1,300
per
loan.

Overall,
companies
produced
10%
fewer
loans
from
January
through
March
compared
to
the
prior
three
months.
But
the
majority
of
originations
(81%)
were
purchase
mortgages,
up
from
the
industry
average
of
65%
for
the
same
period.

Among
the
companies
that
reported
production
data
for
Q1
2025,
82%
were
IMBs,
while
the
remaining
18%
were
subsidiaries
or
other
non-depository
institutions.

Other
key
findings
from
the
report:

• 
  Average
  pretax
  production:
  Loss
  of
  7
  basis
  points
  in
  Q1
  2025
  compared
  to
  a
  4-bps
  loss
  in
  Q4
  2024
• 
  Average
  production
  volume:
  $488
  million
  in
  Q1
  2025;
  $540
  million
  in
  Q4
  2024.
• 
  Average
  loan
  balance
  (first
  and
  second
  liens,
  HELOCs,
  others):
  $346,714
  in
  Q1
  2025;
  $347,794
  in
  Q4
  2024.  
• 
  Production
  revenue
  (fee
  income,
  net
  secondary
  marketing
  income
  and
  warehouse
  spread):
  $12,551
  per
  loan
  (373
  bps)
  in
  Q1
  2025;
  $11,190
  per
  loan
  (339
  bps)
  in
  Q4
  2024.  
• 
  Production
  expenses
  (commissions,
  compensation,
  occupancy,
  equipment
  and
  others):
  $12,579
  per
  loan
  (381
  bps)
  in
  Q1
  2025;
  $11,230
  per
  loan
  (344
  bps)
  in
  Q4
  2024.
• 
  Servicing
  net
  financial
  income
  (without
  annualizing):
  $22
  per
  loan
  in
  Q1
  2025;
  $142
  per
  loan
  in
  Q4
  2024. 
• 
  Servicing
  operating
  income
  (excludes
  MSR
  amortization,
  changes
  in
  valuation
  net
  of
  hedge
  and
  sales):
  $90
  per
  loan
  in
  Q1
  2025;
  $84
  per
  loan
  in
  Q4
  2024.