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Th e M Rep o RT | 43 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t SERVICING THE LATEST mortgage Banking Profits dive in 2013 per-loan profits drop nearly 43% from 2012 as production costs surge. a ccording to the Mortgage Bankers Association (MBA), independent mortgage banks and mortgage subsidiar- ies of chartered banks earned an average $1,242 on each loan originated in 2013, down 43.5 percent from $2,199 the previous year. MBA's VP of industry analysis, Marina Walsh, called 2013 net production profits "respectable," even with the massive decline. "In fact, they were the second highest recorded since [the] inception of the Performance Report in 2008," Walsh said. At the same time, she noted that net production profits throughout the year's second half were substantially lower than in the first half, owing in large part to per-loan production expenses, which climbed to an average $6,539 in the latter part of the year compared to $5,743 earlier on. For the whole year, per-loan costs averaged $5,948, including commissions, compensation, occu- pancy, and other expenses. In 2012, per-loan expenses averaged $5,137. MBA's performance report did show some positives, at least for servicers: net servicing income per loan last year was $257, nearly ten times that of 2012. Including all business lines, MBA reports 91 percent of firms in its study posted pre-tax net financial profits in 2013, down from 97 percent in 2012. In the second half of the year alone, only 69 percent reported profits, down more than a quarter from the first half. Originator rankings little changed in Q1 production was down all around, but the major players were still the same. a ccording to data collected and re- leased last month by Mortgage Daily, first-quarter origination dollar volume came to an estimated $252 billion, a 25 percent drop from the prior quarter and the third straight quarterly decline. As already seen in their earn- ings reports for Q1, many of the nation's top lenders have taken losses on the mortgage banking side as a result of the downward trend, which itself could be blamed on falling demand and restrictive loan standards. Staying firmly in the No. 1 spot for the quarter was Wells Fargo, which held on to 14.3 percent of the market with $36 billion in origination volumes, down from $50 billion in Q 4 2013. JPMorgan Chase followed, stay- ing in the second-rank spot with $18 billion. While the rest of the pack remained the same from the previ- ous period, their order has been shuffled: Tying for third place were Quicken Loans and Bank of America, each producing about $11 billion in loans, while U.S. Bank slipped to fifth place with $9 billion. Missing from the latest quarter- ly list were a number of smaller firms who refused to report data, "all which reported . . . when times were good," according to Mortgage Daily. Just like in Q 4, Stonegate Mortgage was the only company to report a quarterly improve- ment in production, reflecting its acquisitions of Crossline Capital, Medallion Mortgage, and Nationstar's wholesale business. On the servicing side, Wells Fargo again beat out all others, boasting a portfolio estimated at $1.81 trillion. Chase and Bank of America fol- lowed with portfolios of $970 bil- lion and $780 billion, respectively. Ranking fourth and fifth were non-bank servicers Ocwen ($392 billion) and Nationstar ($384 bil- lion), who have each seen their growth stymied by heightened scrutiny from New York's super- intendent of financial services, Benjamin Lawsky. Both compa- nies have pledged to work with Lawsky's office to dispel allega- tions of mistreating customers and ease concerns of their quick growth over the last year. Going by Fannie Mae's estimate of $9.86 trillion in home loans outstanding, Mortgage Daily esti- mates market share of the top 10 biggest servicers slipped again to 56.1 percent, a drop of 1.3 percent- age points. $252 B First-quarter origination dollar volume — Mortgage Daily