Mortgage banking production profits fell to $657 per loan in 2004 from $1,272 per loan in 2003 according to the Mortgage Bankers Association's annual cost study released Tuesday. As volume declined in 2004, per-loan operational costs increased and were only partially offset by increases in secondary marketing income, including servicing values. "The year 2004 marked a departure from the recent years of unprecedented mortgage activity and profitability," said Douglas Duncan, MBA's chief economist and senior vice president of research and business development. "Narrowing warehouse interest spreads, increased pricing pressures, and higher sales and fulfillment costs on a per-loan basis posed challenges for mortgage bankers. But at the same time, we did see recoveries in the area of servicing - after three years of worsening losses, servicing operations posted a profit in 2004 on a per-loan basis," he said. The MBA study analyzes major developments and trends in income, expenses,...
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