Independent mortgage banks (IMBs) delivered a pretax net production profit of $950 per loan in the second quarter of 2025, rebounding from a $28 loss in the prior quarter. The improvement was fueled by seasonality, cost reductions and higher average loan balances.
The data, released on Tuesday, comes from the Mortgage Bankers Association report covering 334 IMBs and mortgage subsidiaries of chartered banks. Of the companies reporting, 82% were IMBs and the remaining 18% were subsidiaries or other non-depository institutions.
“IMB net production income reached its highest level since the fourth quarter of 2021,” said Marina Walsh, MBA’s vice president of industry analysis, in a statement.
Walsh attributed the results to stronger purchase volume alongside a $1,600 per-loan drop in production costs as headcount declined quarter over quarter. “At the same time, average loan balances reached a study-high, resulting in an increase in gross production revenue,” she added.
Profitability was widespread: 80% of firms posted pretax net financial profits across origination and servicing businesses, up from 58% in Q1, despite minimal mortgage servicing rights (MSR), which contributed to a slightly higher servicing net financial income to companies.
Loan production volume climbed 28.5% from April through June compared to the prior three months, with purchases making up 82% of originations — well above the industry average of 67% during the period.
Other key findings from the report:
- Average pretax production: Profit of 25 basis points in Q2 2025 compared to a 7-bps loss in Q1 2025
- Average production volume: $636 million per company in Q2 2025; $488 million per company in Q1 2025.
- Average loan balance (first and second liens, HELOCs, others): $374,151 in Q2 2025; $364,339 in Q1 2025.
- Production revenue (fee income, net secondary marketing income and warehouse spread): 346 bps in Q2 2025; 373 bps in Q1 2025.
- Production expenses (commissions, compensation, occupancy, equipment and others): 321 bps in Q2 2025; 381 bps in Q1 2025.
- Servicing net financial income (without annualizing): $30 per loan in Q2 2025; $22 per loan in Q1 2025.
- Servicing operating income (excludes MSR amortization, changes in valuation net of hedge and sales): remained at $90 per loan in Q2 2025.
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