On a per-loan basis, the net cost of originating a loan last year was $739, according to the Mortgage Bankers Association's 2004 Cost Study. That's 26 percent less than what it cost in 2002. The cost is calculated as the origination fees less associated expenses such as loan officer and broker commissions, overhead and production support expenses. The study analyzes trends in income, expense, productivity and profitability for one- to four-unit residential mortgage operations through 2003. Other highlights of the study include: Mortgage banks with the highest average percentage of purchased production had the lowest net cost to originate, coming in at $480 per loan. Mortgage banks with the largest volume had the lowest net cost to originate – $713 per loan. Net warehousing ...
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