Average IMB lost $2,812 per origination in Q4 

Only one in four IMBs were profitable in Q4 2022: MBA

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks spilled red ink in the fourth quarter of 2022 amid a jump in mortgage rates.

These companies reported a net loss of $2,812 on each loan originated from October to December, an increase of more than four times the average per-loan loss of $624 in the third quarter, according to the Mortgage Bankers Association (MBA).

“For the third consecutive quarter, the average pre-tax net production income was in the red, reaching a new survey low of 99 basis points of loss in the final three months of 2022,” said Marina Walsh, MBA’s vice president of industry analysis.

Basis-point revenues also dropped to levels not seen since the fourth quarter of 2011, Walsh noted.

Bottom line is that even when all business lines are considered – mortgage production and mortgage servicing – only one in four companies were profitable in the fourth quarter of 2022.

“This has been a challenging time for mortgage originators, with cost-cutting measures, including layoffs, not being enough yet to turn the tide,” Walsh said.

IMBs generated $436 million in origination volume on average in the fourth quarter, down from $578 million in the third quarter. Production volume declined for eight consecutive quarters. 

The volume by count per company averaged 1,395 loans in the fourth quarter, down from 1,819 loans in the previous quarter. On a per-loan basis, production revenues decreased to $9,637 per loan in the fourth quarter, down from $10,392 per loan in the third quarter.

The average loan balance dropped to $322,225 in the fourth quarter, a decline of 4% from the previous quarter’s $335,940, which is indicative of a moderation in home price growth.

Total loan production expenses rose to a study high of $12,450 per loan in the fourth quarter, up from $11,016 per loan in the third quarter of 2022. Loan production expenses averaged $7,068 per loan from the third quarter of 2008 to the last quarter of 2022, .

Servicing operating income — which excludes MSR amortization, gains or loss in the valuation of servicing rights net of hedging gains or losses, and gains or losses on the bulk sale of MSRs — was also up to $104 per loan in the fourth quarter from the previous quarter’s $95. 

The sale of MSRs does not directly impact earnings as a revenue stream, but the conversion of MSRs into cash via sales deals bolsters a lender’s cash flow and overall liquidity. IMBs and mortgage subsidiaries of chartered banks may continue to be in the red until the second quarter of this year. 

The MBA forecasts total industry volume is expected to pick up starting in the second quarter, and the 30-year fixed mortgage rate is forecast to decline as the year progresses. 


  1. Hello, thank you for the article. Do you have any charts or graphs that show profitability over the past few years for the Originators? Thank you.

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