Independent mortgage banks and their subsidiaries earned less on newly originated mortgages in the fourth quarter as secondary marketing income per loan fell to $3,870 from $4,069 in the third quarter, according to the Mortgage Bankers Association's Fourth Quarter 2010 Mortgage Bankers Performance Report. The banks' average profit per loan fell approximately $300, hitting $1,082 in 4Q, down from $1,423 per loan in the third quarter. "Rising interest rates during the fourth quarter, particularly in the month of December, had an adverse impact on net gain on sale for many independent mortgage bankers" said Marina Walsh, the MBA's associate vice president of industry analysis. The 30-year, fixed-rate mortgage averaged 4.82% in December, 37 basis points above November levels. Walsh added, "Considering such variables as the timing of rate locks, pull-through expectations, and hedging effectiveness, some mortgage bankers' earnings were hurt by the rapid change in rate environment in the fourth quarter." The MBA's report also reported the refinance share of total originations at independent mortgage banks grew to 63% in 4Q, up from 45% a year earlier. The "net cost to originate" a mortgage also increased to $2,827 per loan on average, up from $2,720 last year. Write to Kerri Panchuk.