The loan losses continue to grow for independent mortgage banks aka IMBs. The Mortgage Bankers Association (MBA) is out with new numbers and they are not good.

The report shows IMBs reported a net loss of $624 on each loan they originated in the third quarter of 2022.

This nearly 800% higher compared with $82 per loan in the second quarter of 2022.

Production revenues also continue to decrease on a per loan basis to $10,392 per loan in the 3rd quarter. This is down from $10,855 per loan in the second quarter.

In addition, servicing income for the third quarter was at $102 per loan. As a result, this is down from $133 per loan in the second quarter. Servicing operating income was at $95 per loan in the third quarter. As a result, this is also down from $97 per loan in the second quarter.

The MBA Report On Independent Mortgage Banks Also Shows:

• The average pre-tax production loss was 20 bps in the third quarter of 2022. As a result, profitability is down by 5 bps in the second quarter of 2022. In addition, this is down from a gain of 89bps in the 3rd quarter of 2021. 
• Average production volume was $578 million per company in the third quarter. This is  down from $705 million in the second quarter. 
• The volume by count per company averaged 1,819 loans in the third quarter. This is down from 2,139 loans in the second quarter.
• Total production revenue decreased to 326 bps in the third quarter. In addition, this is down from 335 bps in the second quarter. 
• Net secondary marketing income decreased to 223 bps in the third quarter, down from 243 bps in the second quarter. On a per-loan basis, net secondary marketing income decreased to $7,165 per loan. This is down from $7,939 per loan in the second quarter.

The MBA Report Has More Bad News For Independent Mortgage Banks:

• The purchase share of total originations increased to a study high of 86% in the third quarter. As a result, this is an increase 5% from the second quarter. The MBA estimates the purchase share industrywide was at 81% in the third quarter of 2022.
• The average loan balance for first mortgages decreased to $335,940 in the third quarter. This is down from $337,130 in the second quarter.
• Total loan production expenses increased to a high of $11,016 per loan in the third quarter. As a result, this is up from $10,937 in the second quarter.
• Personnel expenses averaged $7,325 per loan in the third quarter, down from $7,371 per loan in the second quarter.
• Productivity decreased to 1.5 loans originated per LO per month in the third quarter. As a result, originations are down from 1.7 loans per LO per month in the second quarter. Production employees include sales, fulfillment, and production support functions.

This Article Originally Appeared On Lender Meltdown.

Read More About Mortgage Lending On MFI-Miami.