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The MReport Webcast: Wednesday 8/27/2014

Per-loan mortgage banking profits bounced back in the second quarter after starting the year on a poor note. The Mortgage Bankers Association (MBA) reported Tuesday that mortgage banks across the country posted a net profit of $954 on each loan originated in the year's second quarter. The report represents a significant turnaround from the first quarter, when mortgage banks took a net loss of $194 for each loan. Marina Walsh, MBA's vice president of industry analysis, said there were a few causes at play in the second-quarter rebound, including better origination volumes and potentially delayed loan closings left over from the first quarter.

Average production volume came to $378 million per company in the second quarter, up about 38 percent over the prior period. Volume count averaged 1,676 per company compared to 1,238. Meanwhile, total loan production expenses, including commissions, compensation, equipment, and other costs, fell to just under 7,000 dollars per loan, a thousand-dollar drop from the first quarter—the biggest decrease in costs in any single quarter since the MBA began reporting.

A third look at home prices for the month of June shows a stall in ongoing improvements as the recovery continues to slow. The S&P Case-Shiller National Price Index gained 6.2 percent annually in June, according to a report released Tuesday from S&P Dow Jones Indices. That figure was down from a yearly increase of 7-point-1 percent in May. The S&P Case-Shiller report compares to Monday's price index from Black Knight Financial Services, which showed a 5.5 percent annual increase at the national level. Both reports offered further evidence of diminishing returns for price growth, a trend analysts expect to continue as the Federal Reserve looks at bringing interest rates up in the near future.

 

About Author: Jordan Funderburk

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