Mortgage production volume increased 45.9% in the second quarter compared with the first quarter to an average of $702 million per lender – the highest individual quarter production volume since 2012, if not longer ago, according to the most recent quarterly mortgage data from mortgage accounting and hedge advisory firm Richey May.
Pre-tax profits were 59 basis points during the second quarter – an increase of 27 basis points compared with the first quarter. The increases were primarily driven by higher production, the firm says in its report.
Servicing portfolio values decreased five basis points during the second quarter, bringing the total decrease since the beginning of 2016 to 11 basis points.
Higher production levels allowed lenders to leverage fixed-cost structures to improve cost per loan by $473 per loan.
Unfunded lock pipelines also increased, indicating that volume in the third quarter will likely surpass that of the second quarter.
In addition to production volume being up, the Mortgage Bankers Association reported in its most recent Quarterly Mortgage Bankers Performance Report that mortgage lenders saw an average profit of about $1,686 per loan in the second quarter – up from a reported gain of $825 in the first quarter.