Independent mortgage bankers and subsidiaries made an average $606 on each mortgage they originated in the first quarter 2010 (Q110), down 32% from $890 in the previous quarter, according to quarterly survey results today by the Mortgage Bankers Association (MBA). Profits-per-origination fell 44% from $1,088 in the year-ago quarter. Average profits in Q110 indicate a slow-down after the MBA found in a previous study that profits-per-origination grew by 272% — or $830 — to $1,135 in 2009, from 2008. A drop in the average production volume for each originating firm in Q110 drove the overall decline in profits. Volume slipped to $157.8m in Q110, from $216.5m in Q409. At the same time, production operating expenses rose to $5,147 per loan in Q110, from $4,402 in Q409. "It is extremely difficult for mortgage companies to effectively manage staffing levels," said Marina Walsh, MBA associate vice president of industry analysis. "Either companies are stretching to meet the incredible demand, or they are carrying excess capacity which drives up per-loan personnel expense." "Despite this challenge as originations declined in the first quarter, the independents and bank subsidiaries still produced an average of 32 basis points of production profit, primarily resulting from higher secondary marketing gains." Net secondary marketing gains -- excluding origination fees -- rose to an average $3,464 per loan in Q110, from $3,110 in Q409. At the same time, however, business expenses rose. Total personnel expense rose to $3,296 per loan in Q110, from $2,756 in the previous quarter. The "net cost to originate" -- or all production expenses and commissions after fee income -- rose to $2,945 per loan, from $2,345 last quarter. Productivity slipped to five loans per sales employee every month in Q110, compared with seven loans per employee each month in Q409. Write to Diana Golobay.