Loan production among independent mortgage bankers increased 50% in the second quarter, compared to the first quarter, according to Richey May & Co.'s Trend Report for Independent Mortgage Bankers.
Purchase volume increased 62%, compared to the first quarter, while refinance volume increased 20%. In addition, un-funded lock pipelines increased 38%.
Part of the reason volumes looked so good for the second quarter is because they were so dismal during the first quarter. Many industry experts have hypothesized that the harsh winter weather in the first quarter kept many would-be home buyers in hibernation.
The business advisory and technology firm forecasts that market conditions will continue improve through the coming months.
‘The increase in un-funded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well,’ says Kenneth Richey, managing partner of Richey May, in a release.
In addition to the increased volume, independent mortgage bankers improved profits by an average of 57 basis points, with many realizing up to 100 basis points in improved pre-tax profits over the previous quarter.
‘Independent mortgage bankers' unit volume, expenses and margins were very close to those they experienced in the third quarter of 2013,’ adds Keith May, managing director, advisory services, for the firm. ‘However, pre-tax profits in the second quarter of 2014 were much higher than in the third quarter of 2013. This is probably because third quarter 2013 was in the middle of a declining market, whereas second quarter of this year was in an improving market.’