“A profit of $1,500 per mortgage, plus $7,195 in costs!!! American homeowners are paying (directly in fees or indirectly in a higher rate) $8,695 on average to obtain a mortgage to buy a home or refinance. That’s outrageous!!! Especially when almost all of these mortgages are government insured or guaranteed. Packaging loans for the government shouldn’t cost this much…

…but it does because of reduced competition and excessive regulation and compliance (most of which is form over substance). One of the Consumer Financial Protection Bureau’s #1 jobs should be getting this cost dramatically lower. I mean come on, most of the defaults had nothing to do with regulation and compliance. It had to do with a bubble, bust, well-intended government housing mandates, and a Great Recession. And think about it, nothing the CFPB has done will prevent another bubble/bust and crisis.”, Mike Perry, former Chairman and CEO, IndyMac Bank

From June 2015 Mortgage Industry Newsletter:

“Speaking of industry figures, independent mortgage banks and mortgage subsidiaries of chartered banks reported a net gain of nearly $1,500 on each loan they originated in the first quarter, per the Mortgage Bankers Association. MBA Vice President of Industry Analysis Marina Walsh said that total production operating expenses per loan remained a challenge, rising to $7,195 per loan in the first quarter, from $7,000 per loan in the fourth quarter. Average production profit rose to 60 basis points in the first quarter, compared to 32 basis points in the fourth quarter. Secondary marketing income rose to 297 basis points in the first quarter, up from 266 basis points in the fourth quarter. Total loan production expenses–commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations–increased to $7,195 per loan in the first quarter, from $7,000 in the fourth quarter. Personnel expenses averaged $4,675 per loan in the first quarter, up from $4,428 per loan in the fourth quarter.”

Posted on June 3, 2015, in Postings. Bookmark the permalink. Leave a comment.

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