According to the Mortgage Bankers Association's Third Quarter 2011 Performance Report, independent mortgage banks and subsidiaries more than doubled their average profit per loan from $575 in the second quarter to $1,263 for loans originated during the third quarter.
Analysts noted the share of total originations accounted for by refinancing rose from 36 percent in the second quarter to 45 percent in the third, calculated by dollar volume. Net origination costs decreased during the period, dropping from $3,513 to $3,360 per loan.
The report also indicated that 86 percent of the firms studied posted pre-tax net financial profits in the third quarter of 2011, up from 70 percent in the second quarter.
"Higher volume helped profitability as production costs were spread over a greater number of loans," said MBA associate vice president of industry analysis Marina Walsh. "Third quarter production expenses dropped on a per-loan basis as volume rose, although expenses remained high by historical standards when compared to other quarters with similar volume."
The mortgage records also reveal that personnel expenses and production operating expenses both decreased compared to the quarter before, while borrower FICO credit scores averaged 734 as opposed to 729 in the second quarter.