Mortgage bankers post surprise gains – but is it enough to signal recovery?
Independent mortgage banks and subsidiaries of chartered banks reported a return to profitability in 2024, according to the Mortgage Bankers Association’s (MBA) Annual Mortgage Bankers Performance Report, released Friday.
The report found these lenders posted an average net production profit of $443 per loan in 2024. This figure marks a significant rebound from 2023, when companies saw an average loss of $1,056 per loan.
“After two preceding years of net losses, net production income was back in the black in 2024,” said Marina Walsh, CMB, MBA’s vice president of industry analysis. “Production revenues improved, and per-loan costs decreased as volume picked up, particularly in the second half of the year.”
Despite the overall improvement, challenges persisted for smaller lenders. According to the MBA, lenders with annual production volumes under $500 million continued to report net losses, extending their streak of negative performance to a third consecutive year. Walsh noted these institutions face difficulty spreading fixed operational costs across smaller loan volumes.
The report showed broader financial recovery across the sector. Including both production and servicing operations, 68% of the firms surveyed posted pre-tax net financial profits in 2024. This is up from 36% in 2023. However, excluding servicing income, only 56% of firms would have recorded profits, highlighting the critical role of mortgage servicing rights in overall performance.
Source: MBA
Among other key findings:
- Average production volume per company increased to $2.1 billion (6,259 loans), up from $1.9 billion (6,021 loans) in 2023.
- The average income from loan production rose to 10 basis points, compared to a loss of 37 basis points the year before.
- Refinancing activity gained momentum, accounting for 16% of originations by dollar volume—up from 11% in 2023. Industrywide, the MBA estimated a refinancing share of 27%, compared to 16% the previous year.
- The average first mortgage loan balance reached a study-high of $357,631, rising from $331,437 in 2023.
- Production revenues per loan climbed to $11,520, while production expenses fell slightly to $11,076 per loan.
Net servicing financial income also improved, averaging $301 per loan, up from $263 in 2023.
The MBA’s annual report aggregates data from independent mortgage banks and mortgage subsidiaries of chartered banks, tracking income and expense metrics since 2008.
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