Loan production among independent mortgage bankers in the second quarter increased by 50% over the previous quarter, the first increase in the past three quarters, according to the 2014 Trend Report for Independent Mortgage Bankers compiled by Richey May & Co.

Purchase volume spiked 62%, while refinance volume increased 20% over the first quarter 2014, the survey of 37 independent mortgage bankers found. 

Unfunded lock pipelines increased among independent mortgage bankers as well, rising 38% over the previous quarter. The positive data is a clear departure from the rest of the mortgage production world, where origination volumes are shrinking as American's attitude towards housing softens.

According to Kenneth Richey, managing partner of Richey May, this uptick indicates that the improved market conditions will continue through the coming months.

“The increase in unfunded lock pipelines suggests that we can expect to see similar, if not more improved, production in the third quarter of 2014 as well,” Richey said.

In addition to the increase in production, 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.

The Trend Report for Independent Mortgage Bankers was generated from the results of Richey May Select. The quarterly Trend Report highlights key performance indicators, such as overall volume and volume by transaction type, as well as loan margins, operating costs, labor output, and more.

“Independent mortgage bankers’ unit volume, expenses and margins were very close to those they experienced in the third quarter of 2013,” said Keith May, Richey May’s managing director, advisory services. “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.”