DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/1535182
MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 64 May 2025 J O U R N A L CLOs, Agency, LifeCo, Bank, Repo, and Debt Funds," said James Millon, U.S. President of Debt & Structured Finance for CBRE. "Looking ahead to 2025, we expect a more dynamic refinancing and investment sales market, fueled by maturing debt, capital realloca- tion in closed-end funds, and strong fundamentals across most real estate sectors. We are particularly optimis- tic about the resurgence of the office occupier market for top-tier assets in major CBDs. Lenders are likely to leverage loan sales to create liquidity for strategically positioned assets and asset management-intensive properties approaching restructured maturity extensions, allowing them to navigate the evolving market landscape." SNAPSHOT: NET PROFITS FOR INDEPENDENT MORTGAGE BANKERS C ompared to 2023, when they reported an average loss of $1,056 per loan, independent mortgage banks and mortgage subsid- iaries of chartered banks recorded an average profit of $443 per loan in 2024, per the MBA. In 2024, 68% of the companies in the study reported pre-tax net financial profits, up from 36% in 2023 and 53% in 2022, when both the production and servicing business lines were included. The proportion of businesses report- ing net financial profits in 2024 would have dropped to 56% if it weren't for the income from the servicing division of the company. "While overall production prof- its were positive, some lenders are still struggling in this tough market environment. For example, for the sub-group of lenders with an annual production volume of less than $500 million in 2024." Key Findings of MBA's 2024 Annual Mortgage Bankers Performance Report: » Average production volume was $2.1 billion (6,259 loans) per company in 2024, up from $1.9 billion (6,021 loans) per company in 2023. On a repeater company basis, average production volume was $2.4 billion (7,284 loans) in 2024, up from $2.0 billion (6,380 loans) in 2023. » In basis points, the average production income was 10 basis points in 2024, up from a loss of 37 basis points in 2023. Since the inception of MBA's Annual Performance Report in 2008, net pro- duction income by year has averaged 47 basis points ($1,077 per loan). » The refinancing share of total origina- tions (by dollar volume) increased to 16% in 2024 from 11% in 2023. For the entire mortgage industry, MBA esti- mates the refinancing share last year increased to 27% from 16% in 2023. » The average loan balance for first mort- gages reached a study-high of $357,631 in 2024, up from $331,437 in 2023. » Total production revenues (fee in- come, net secondary marking income, and warehouse spread) were 345 basis points in 2024, up from 329 basis points in 2023. On a per-loan basis, production revenues were $11,520 per loan in 2024, up from $10,202 per loan in 2023. » Total loan production expenses—com- missions, compensation, occupancy, equipment, and other production expenses and corporate allocations— decreased to $11,076 per loan in 2024, down from $11,258 in 2023. » Net servicing financial income, which includes net servicing operational income, as well as mortgage servicing right (MSR) amortization and gains and losses on MSR valuations, was $301 per loan in 2024, up from $263 per loan in 2023. » Including all business lines, 68% of the firms in the study posted pre-tax net financial profits in 2024, up from 36% in 2023. AMERICAN HOMEBUYERS SHOW THEIR KNOWLEDGE GAPS T here are two parts to any purchase: the educational aspect and the financial aspect. When buying a home, you'd hope that everyone—especially first-time homebuyers—has done their home- work and comes in with a firm grasp of the process and its jargon. Yet a recent study from JW Surety Bonds showed some large knowledge gaps that chal- lenge homeowners and could turn their American Dream into a nightmare (or at least some sleepless nights). » 76% of homeowners lacked home- ownership literacy until after buying their home. » One in three homeowners don't know their mortgage interest rate. » 22% of homeowners are unsure of their monthly mortgage payment. » More than one in four homeowners (27%) were surprised by unexpected fees during the homebuying process. » One in five prospective homebuyers have delayed purchasing a home due to confusion around financial literacy. » One in eight prospective homebuyers cannot accurately define "mortgage," and 43% are unsure about the mean- ing of "mortgage rate." » One in four Generation Z renters get their homebuying knowledge from TikTok. JW Surety Bonds found significant knowledge gaps among homeowners, including the unexpected challenges and financial surprises many discov- ered after purchasing their homes. It's a challenging time to buy a home in the current U.S. housing market. Sixty percent of the homeown- ers surveyed reported they wouldn't be able to afford their home at today's market prices. Worse, most homeown- ers signed on the line without fully