Banks and mortgage lending firms lost an average of $301 on each home loan last year.
The US housing market tightened so severely last year that mortgage lenders began taking losses on home loans they originated for the first time on record, according to industry data.
The average $301 loss marked a major downturn compared to the previous leader, when mortgage lenders recorded an average profit of $2,339 per home during a record boom in US housing demand. “The stellar profits of the previous two years dissipated because of the confluence of declining volume, lower revenues, and higher costs per loan,” Walsh said in a statement.Surging mortgage rates crushed application demand last year.“Companies could not adjust their capacity fast enough,” Walsh added. “The number of production employees declined, but not at the same pace as origination volume. As a result, productivity in 2022 fell to a low of 1.5 closed loans a month per production employee.
That was down from 98% who turned a profit just two years earlier, during a pandemic-era housing boom.The cost of mortgage lending ballooned to $10,624 per loan last year, outpacing gains in loan servicing.and reorganizations throughout the real estate sector.
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