Profit margins for independent mortgage bankers and subsidiaries continued to fall in the first quarter of this[IMAGE]
year, as production volume declined and production operating expenses rose, the ""Mortgage Bankers Association"":http://www.mortgagebankers.org/default.htm (MBA) reported Tuesday.
According to MBA's quarterly Mortgage Bankers Production Survey, independent mortgage bankers and subsidiaries made an average profit of $606 on each loan they originated in the first quarter of 2010, down from
[COLUMN_BREAK]$890 per loan in the fourth quarter of 2009 and substantially lower than the $1,088 average profit recorded one year ago.
MBA said this decline was driven by a drop in the average production volume for each firm to $157.8 million in the first quarter, compared to $216.5 million the previous quarter. Another contributing factor was the quarter-to-quarter increase in production operating expenses, which came in at $5,147 per loan in the first quarter compared to $4,402 per loan in the fourth quarter of 2009.
The report also found that total personnel expenses rose to $3,296 per loan during the first three months of this year, up from $2,756 per loan one quarter earlier. And during the same period, the ""net cost to originate"" rose to $2,945 per loan from $2,345 per loan.
According to the report, 75 percent of the firms in the study posted pre-tax net financial profits in the first quarter of 2010, down slightly from 76 percent in the fourth quarter of 2009. Additionally, the average pull-through â€" the number of closings divided by the number of applications â€" fell to 68 percent in the first quarter of this year from 73 percent the previous quarter.