Banks post higher profits on each loan

Banks are making more profits on each loan they originate a 377 percent increase in just a six-month period, according to the Mortgage Bankers Association.

On average, mortgage banks made a profit of $1,263 for each loan they originated during the third quarter” that’s up from $575 per loan in the second quarter of 2011. In the first quarter, they made $346 per loan.

Higher volume helped profitability as production costs were spread over a greater number of loans,said Marina Walsh, MBA’s associate vice president of industry analysis. Third quarter production expenses dropped on a per-loan basis as volume rose, although expenses remained high by historical standards when compared to other quarters with similar volume.

Refinancings made up the biggest bulk of originations ” by dollar volume it was 45 percent in the third quarter compared to 36 percent in the second quarter.