Mortgage bankers' profits skyrocketed in the first quarter as a result of the refinance boom that increased overall production volumes, according to the Mortgage Bankers Association.
Lenders earned an average of $1,088 per loan, a 635% increase from the fourth quarter's $148 per loan, the trade group found in its first quarterly report measuring the performance of independent mortgage bankers and subsidiaries of banks, thrifts and hedge funds.
The industry's results have improved considerably since the first half of 2008, when companies made $184 a loan on average, and 2007, when they lost $560 per loan.
Refinancings made up roughly 66% of total originations in the first quarter, compared with 42% in the fourth quarter, the MBA report found.
Average production jumped to $213.9 million in the first quarter from $125.6 million in the fourth quarter, according to the report.
Meanwhile, the cost to originate, which includes operating expenses and commissions but excludes servicing premiums and warehouse spreads, fell 25%, to $1,725 per loan, the MBA said.