According to the recently released Quarterly Mortgage Bankers Performance Report by the Mortgage Bankers Association (MBA), independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks reported a pre-tax net production profit of $950 on each loan they originated in Q2 of 2025, as opposed to a net loss of $28 per loan in Q1 of 2025.
“IMB net production income reached its highest level since the fourth quarter of 2021,” said Marina Walsh, CMB, MBA’s Vice President of Industry Analysis. “The seasonal pickup in purchase volume, and the average number of production employees decreasing from last quarter, led to production costs dropping by more than $1,600 per loan. At the same time, average loan balances reached a study-high, resulting in an increase in gross production revenue.”
Measuring IMBs: Profit or Loss?
The second quarter of 2025 saw an average pre-tax production profit of 25 basis points (bps), while the first quarter saw a loss of 7 bps. From Q1 of 2008 to the most current quarter, the average quarterly pre-tax production profit was 40 basis points.
The average production volume for each company increased from $488 million in the first quarter to $636 million in Q2. Compared to 1,448 loans in Q1, the average volume by count per company increased to 1,862 loans in Q2.
In Q2, total production revenue (which includes fee income, net secondary marketing income, and warehouse spread) dropped from 373 basis points in Q1 to 346 basis points. Production revenues per loan climbed from $11,190 per loan in Q4 to $12,551 per loan in Q1.
“Servicing net financial income improved slightly, as impairments on mortgage servicing rights were minimal,” Walsh said. “Combining production and servicing operations, 80 percent of mortgage companies in the sample posted overall profits—the highest percentage since the third quarter of 2021.”
Additional Key Findings — National
- In Q2 of 2025, the total cost of loan production—which includes commissions, compensation, occupancy, equipment, and other production costs and corporate allocations—dropped from 381 basis points in Q1 to 321 basis points.
- In 2025, per-loan costs dropped from $12,579 per loan in Q1 to $10,965 per loan in Q2. Loan production costs have averaged $7,750 per loan since Q1 of 2008.
- By dollar volume, an estimated 82% of first mortgage originations were purchased. According to MBA, the buy share for the entire mortgage business was 67% in Q2 of 2025.
- The average first mortgage loan balance rose from $364,339 in Q1 to $374,151 in Q2. In Q1, the average loan balance for all mortgages (first, second mortgages, HELOCs, and other) went up from $346,714 to $355,558.
- Compared to 322 people in Q2 of 2025, the average number of production workers per company decreased to 315 in Q2.
- Without annualizing, servicing net financial income increased from $22 per loan in Q1 to $30 per loan in Q2. Additionally, in Q2, servicing operational income stayed at $90 per loan, excluding MSR amortization, profits or losses in the value of servicing rights net of hedging gains or losses, and gains or losses on the bulk sale of MSRs.
- Some 80% of the companies in the report reported pre-tax net financial profits in the second quarter of 2025, up from 58% in Q1, when all business lines (production and servicing) were included.
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