With average origination volume at its highest level in four years, independent mortgage bankers now have five consecutive quarters of pretax net production profits, a quarterly survey found.
This continued the turnaround from the widespread losses posted between 2022 and 2024, Marina Walsh, the Mortgage Bankers Association's vice president of industry analysis, said.
"Average production volume per firm was $689 million, the highest level since the second quarter of 2022," Walsh said in a press release. "While production revenues dropped from the previous quarter as gain-on-sale margins narrowed, production expenses also decreased, reaching their lowest level in basis points since the third quarter of 2021."
IMBs per loan originated profits for the quarter
IMBs and mortgage subsidiaries of chartered banks netted $973 pretax on each loan they originated. This compared with $727 in the first quarter and $950 one year ago.
Put another way, lenders made an average of 25 basis points per loan, up from 16 basis points three months ago but unchanged from the second quarter of 2025.
"Quarterly production profits are still lower than the historical average of 39 basis points dating from 2008, but overall, mortgage companies are managing to stay in the black," Walsh said. "Combining both production and servicing operations, roughly 85% of the more than 330 mortgage companies in our sample posted overall profits."
However, among the public IMBs which reported a net GAAP loss for the period are: Finance of America; loanDepot; Onity; UWM Holdings; and Better Home & Finance.
How revenue and expenses compared with prior periods
IMBs' total production revenue, made up of fee income, net secondary marketing income, and warehouse spread, decreased to 333 basis points in the second quarter, down from 353 basis points three months prior and 346 basis points in the first quarter.
Measured in dollars, production revenues hit to $11,909 per loan versus $12,626 in the first quarter and $12,551 a year ago.
On the other side of the ledger, total loan production expenses decreased to 308 basis points for the most recent period from 336 basis points three months ago and 321 basis points for the same quarter in 2026.
Put another way, these per-loan costs of $10,936 were lower than $11,898 in the first quarter and $10,965 for last year's second quarter. These expenses include commissions, compensation, occupancy, equipment, along with other production expenses and corporate allocations.
When it comes to servicing results, net financial income totaled $80 per loan, up from $77 in the first quarter and a huge gain over $30 for the second quarter of 2025.
Servicing operating income, which excludes several items around mortgage servicing rights amortization, valuation and sales was $85 per loan in the second quarter, down from $93 for the period ended March 31. For the second quarter last year, this was $90 per loan.
What BCG's look at the second quarter found
Separately, Boston Consulting Group, which tracks 10 banks and six publicly traded IMBs, in its second quarter report, noted these companies had a 9% year-over-year increase in volume for the period. But purchase demand at the four IMBs it had this information for, slipped 10 percentage points, to a median of 62%. All four (Pennymac, loanDepot, United Wholesale Mortgage and Rithm) had significant increase in purchase activity versus the first quarter.
Of the seven banks and IMBs it had gain-on-sale data for, five reported a quarter-to-quarter decline and four were lower on an annual basis.
The only two where the GOS increased as compared to the first quarter were Rithm, up 20 basis points, and UWM, 10 basis points higher. They were also 42 basis points and 20 basis points higher on an annual basis; PNC was 110 basis points higher versus the second quarter of 2025.
JD Power's 2026 U.S. Mortgage Servicer Satisfaction Survey results noted the industry has been focused on building better customer relationships, which was seen in results on their recapture potential.
In the discussion with its clients, BCG in its report noted that lenders and servicers "are thinking of ways to best leverage their MSR assets and current customer relationships."
This includes:
- Building robust client databases;
- Enhancing cross-sell opportunities;
- Hedging against volatile origination volumes; and
- Stabilizing operating cash flows.
As part of improving their customers' journey throughout the process when it comes to servicing, BCG found its "clients are seeing efficiency gains from using Gen AI to reduce call center costs."
On the originations side, they are looking at Gen AI applications to drive efficiencies at the point of sale.
