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Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported an average profit of $443 on each loan they originated in 2024, up from an average loss of $1,056 per loan in 2023, according to the Mortgage Bankers Association (MBA)’s annual Mortgage Bankers Performance Report.
“After two preceding years of net losses, net production income was back in the black in 2024,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement. “Production revenues improved, and per-loan costs decreased as volume picked up, particularly in the second half of the year.
“While overall production profits were positive, some lenders are still struggling in this tough market environment,” Walsh added. “For example, for the sub-group of lenders with an annual production volume of less than $500 million in 2024, average net production losses continued for the third consecutive year. It has been difficult to spread the fixed costs of originating loans over [a] lower volume.”
Encompassing both the production and servicing business lines, 68% of the firms in MBA’s survey posted pretax net profits in 2024, up from 36% in 2023 and 53% in 2022.
But the MBA clarified that without profits from the servicing side of the business, the percentage of firms with overall net profits would have fallen to 56% in 2024.
In 2024, the average production volume per company rose to $2.1 billion (or 6,259 loans), up from $1.9 billion (or 6,021 loans) in 2023. For repeat participants, volume averaged $2.4 billion (7,284 loans) in 2024, up from $2 billion (6,380 loans) in 2023.
Total production revenues (which include fee income, net secondary marketing income and warehouse spread) increased to 345 basis points (bps) or $11,520 per loan, up from 329 bps ($10,202) in 2023. Expenses such as commissions, compensation, occupancy and equipment fell slightly to $11,076 per loan, down from $11,258 the year prior.
As a result, average production income improved to 10 bps, compared to a loss of 37 bps in 2023. Since the inception of the MBA’s annual performance report in 2008, net production income by year has averaged 47 bps ($1,077 per loan).
The refinance share of originations for IMBs rose to 16% (up from 11% in 2023). For the mortgage industry as a whole, the MBA estimated a refi share of 27%, up from 16% in 2023.
The average balance for first-lien mortgages hit a record high of $357,631, up from $331,437 a year earlier. Net servicing income grew to $301 per loan, up from $263 in 2023.
