IMB production profits hold steady in Q1 as costs climb

Most mortgage bankers were profitable in the first three months of 2026 despite higher per-loan expenses, as servicing income lifted their financials, according to the Mortgage Bankers Association (MBA)’s Quarterly Mortgage Bankers Performance Report.

Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks posted a pretax net production profit of $727 per loan in the first quarter of 2026, up from $674 per loan in the fourth quarter of 2025.

“Average production profits in the first quarter of 2026 remained relatively flat at 16 basis points, despite a decline in production volume from the previous quarter,” Marina Walsh, MBA’s vice president of industry analysis, said in a statement. “Production costs grew by close to $800 per loan, but increases in production revenues offset these additional costs.”

The report covers 324 companies, 81% of which are independent mortgage companies, while 19% are bank subsidiaries and other nondepository institutions.

Servicing books

Walsh said servicing performance helped bolster overall results, as markdowns on mortgage servicing rights (MSRs) slowed. Combining both production and servicing business lines, 76% of lenders were profitable in the first quarter, up from 68% in Q4 2025.

“Still, disparities between the top and bottom performers remain wide,” Walsh added.

Servicing net financial income (not annualized) improved to $77 per loan serviced in Q1 2026, up from $13 per loan in the prior quarter. Servicing operating income — which excludes MSR amortization, valuation changes net of hedging, and gains or losses on bulk MSR sales — was $93 per loan serviced, up from $90.

Purchase market

In a purchase-driven market with larger average loan balances, the average production volume per company was $621 million in Q1 2026, down from $643 million in Q4 2025. By loan count, volume fell to an average of 1,729 loans per company, down from 1,973.

The purchase share of first mortgage originations by dollar volume was 65% for reporting companies in the first quarter. MBA estimates the industrywide purchase share at 60% for the same period. Meanwhile, the average first-mortgage loan balance increased to $387,881, up from $379,587 in the prior quarter.

Costs, however, continue to rise. Total loan production expenses climbed to 336 basis points in the first quarter of 2026, up from 323 bps in the fourth quarter of 2025. On a per-loan basis, production costs rose to $11,898, up from $11,102. Since the first quarter of 2008, production expenses have averaged $7,903 per loan, highlighting the long-term cost inflation that IMBs face.

Flávia Furlan Nunes reported and wrote this article with drafting assistance from HousingWire Automation, an editorial tool that helps transform announcements and industry data into HousingWire-style news coverage.