MBA: 2016 More Profitable Than 2015, Despite Rate Increase

How does your loan volume compare to the “average” lender’s? Is it higher? Lower? Do you really want to be “average”? Is it enough to simply beat the average, or can (and do) you hold yourself to a higher standard?

cash_houseMBA just released some positive statistics that I think will make everyone feel a little better about the inevitable interest rate increase! The association’s Annual Mortgage Bankers Performance Report (as cited by HousingWire) showed average bank profits in 2016 were $1,346 on every loan originated last year. That’s $157 greater than profits on 2015 loans, despite the lower rates and no interference from the Fed.

MBA also noted 94 percent of independent mortgage banks and mortgage subsidiaries of chartered banks showed overall pre-tax net profits during 2016, compared to only 92 percent in 2015. The average production profit in basis points (bps) was 58 bps compared to 52 bps the previous year. Loan volume was also 11,881 loans ($2,859 million) in 2016, compared to 9,604 loans ($2,254 million) in 2015, with MBA estimated production volumes of $1.89 trillion in 2016, up from $1.68 trillion in 2015.

Average loan balances for first mortgage also rose to $244,945 with revenues of $8,555 per loan, the highest levels yet since MBA began undertaking this study. As if those numbers weren’t useful enough, here’s one to really take to heart. Mortgage lenders originated an average of 2.4 loans per person, per month, up from 2.2 in 2015. This is a great metric to utilize to your advantage. How does your loan volume compare to the “average” lender’s? Is it higher? Lower? Do you really want to be “average”? Is it enough to simply beat the average, or can (and do) you hold yourself to a higher standard?

Once you’ve figured out where you fall on the scale and whether you’re comfortable with that place or not, it’s time to determine how you can further separate yourself from the competition and the “average.” Networking, cold calling and engaging in positive habits are a few ways. Keeping yourself healthy and happy are also keys to ensuring you’re geared up to deliver your peak performance. Finally, you’ll want to be sure you’re staying abreast of the latest news in our industry and in your specific market. Finance of America and myself are two great starting resources, but as we know, there are many other valuable voices out there as well.

Western Division Business Development Manager

Please note: I reserve the right to delete comments that are offensive or off-topic.