The profitability of small mortgage banking companies jumped to $1,423 per loan in the third quarter, a 55% spike from the previous quarter, thanks to refinancings and strong demand for mortgage-backed securities, according to a report released Tuesday by the Mortgage Bankers Association.
"There was demand from foreign central banks for high-quality MBS products," said Marina Walsh, the MBA's associate vice president of industry analysis.
Such desire boosted secondary market gains to $4,069 in the third quarter, compared with $3,455 in the previous quarter, according to the MBA's Quarterly Mortgage Bankers Performance Report.
The figures on 320 independent mortgage banks (and subsidiaries of banks and thrifts) also show a quarterly increase in origin-ations.
These companies, on average, originated $237 million in the third quarter, a 20% gain from the second quarter.
The third quarter was not a big refinancing quarter for the megabanks, the MBA found, but refinancings accounted for 57% of originations at independents, compared with 35% in the second quarter.
Walsh said that independent mortgage bankers were able to catch a refi wave a "little bit faster" than the larger banks.
