Independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks ended 2025 in profitable territory, posting a pretax net production profit of $674 per loan in the fourth quarter.
While this figure represents a solid year-over-year recovery from the industry-wide losses recorded by IMBs at the end of 2024, it marks a notable drop from the $1,201 per-loan profit achieved in the third quarter of 2025.
According to newly released data from the Mortgage Bankers Association (MBA), this quarterly decrease was primarily driven by declining production revenues, even as overall production volumes rose.
“Net production profits averaged 17 basis points in the fourth quarter of 2025, an increase from losses of 4 basis points in the fourth quarter of 2024,” said Marina Walsh, MBA’s vice president of industry research, in a press release.
Walsh noted that when combining both production and servicing operations, 68% of the 338 mortgage companies tracked in the MBA’s sample reported overall profitability in the final quarter of 2025. This shows a steady annual improvement compared to 61% one year prior, though it is a step down from the 85% of firms that posted profits in a robust third quarter of 2025.
Digging into the per-loan financials, production revenues decreased to $11,776 per loan in the fourth quarter, down from $12,310 in the preceding quarter. Meanwhile, the cost to originate a loan remained flat. Total loan production expenses — which encompass commissions, compensation, occupancy, equipment and corporate allocations — dipped only slightly to $11,102 per loan in the final quarter of 2025, down from $11,109 from the prior quarter.
Despite this drop, per-loan costs remain historically elevated. From the first quarter of 2008 through the end of 2025, loan production expenses have averaged just $7,846 per loan.
Loan balances also continued to trend upward at the close of the year. The average loan balance for first mortgages climbed to $379,587 in the fourth quarter, an increase from $373,414 in the third quarter.
The purchase share of these first-mortgage originations accounted for a dominant 71% of dollar volume among the surveyed firms. By comparison, the MBA estimates the purchase share for the broader mortgage industry was 58% in the fourth quarter.
On the servicing side of the ledger, financial metrics also cooled slightly. Servicing net income for the fourth quarter dropped to $13 per loan serviced, markedly less than the $29 per loan seen in the third quarter.
