“Net production profits averaged 17 basis points in the 4th quarter of 2025, a boost from losses of 4 basis points in the fourth quarter of 2024,” Marina Walsh, the MBA’s vice president of industry analysis, stated in a statement.
“Combining both production and servicing operations, 68% of mortgage companies in MBA’s sample posted general earnings in the fourth quarter of 2025, a design boost of 61% one year. In spite of these enhancements, fourth-quarter production earnings were below the previous quarter.”
Information thanks to the Home loan Bankers Association
Walsh went on to note that, in between the third and 4th quarters of 2025, the average IMB saw production volume increase, while revenues declined and the general expense to come from stayed relatively flat. This was tied in part to increased loan locks in September that were reported in Q3 profits instead of in Q4, which follows relevant accounting guidelines.
The MBA likewise discussed that increased markdowns and amortization from benefits throughout home loan servicing rights (MSR) portfolios made a dent in earnings throughout origination and maintenance company lines from October through December.
Much deeper dive
The trade group’s quarterly Mortgage Bankers Efficiency Report relied on data from 338 companies in the nonbank sector. Eighty-one percent of the business that reported production information for the last quarter of 2025 were IMBs, while the other 19% were home mortgage subsidiaries or other nondepository institutions.
The information showed that the typical business had a pretax production profit of 17 basis points in Q4 2025, down from a profit of 33 bps in the previous quarter. For historic contrast, the average quarterly pretax production earnings given that the start of 2008 is 39 bps.
Across origination and servicing channels, 68% of the business in the MBA’s report had a pretax net profit in Q4 2025, below 85% in the previous quarter.
Usually, companies produced $643 million in mortgage originations during the 4th quarter, up from $634 million in the 3rd quarter. Typical loan count likewise increased during the quarter, from 1,866 to 1,973 per business.
Overall production income– that includes cost income, net secondary marketing earnings and warehouse spread– dropped to 340 bps in Q4, down 19 bps compared to Q3. On a per-loan basis, production revenue declined throughout the quarter, from $12,310 in Q3 to $11,776 in Q4.
Meanwhile, overall production costs– that includes commissions, settlement, tenancy, equipment and other production costs and business allocations– reduced to 323 bps in Q4, down a little from 326 bps in the 3rd quarter. On a per-loan basis, expenditures dropped a little from $11,109 to $11,102. This figure stays substantially higher than its historic standard of $7,846 per loan because Q1 2008.
Purchase loans represented 71% of all first-lien mortgage originations by dollar volume for nonbanks from October through December. The MBA estimated that the purchase share across the entire home loan industry was 58% during the exact same period.
The typical loan balance for a very first home loan increased from $373,414 in Q3 to $379,587 in Q4. Throughout all originations, including junior-lien loans, such as home equity lines of credit (HELOCs), the average balance rose from $355,145 to $362,912 throughout the very same period.
In the servicing channel, net financial earnings in Q4 (without annualization) was $13 per loan, down from $29 per loan in the previous quarter. And servicing operating income dropped from $92 to $90 per loan throughout the quarter. This figure omits MSR amortization, gains and losses in the evaluation of maintenance rights net of hedging gains and losses, as well as gains and losses on bulk sales of MSRs.