It may seem like a lifetime ago now, but before coronavirus wreaked havoc on the economy, independent mortgage banks were enjoying a rebound.

Data from the Mortgage Bankers Association’s (MBA) Annual Mortgage Bankers Performance Report revealed that independent mortgage banks (IMBs) and mortgage subsidiaries of chartered banks made an average profit of $1,470 on each they loan they originated.

That’s up from $367 per loan in 2018 — a year-over-year increase of just over 300%.

Marina Walsh, the MBA’s vice president of industry analysis, called 2019 ” a much-improved mortgage market compared to the very challenging environment for the industry in 2018.”

“After an unfavorable first quarter, independent mortgage companies saw significant improvement in profitability starting in the second quarter, driven by a jump in refinancing activity from the steady decline in mortgage rates,” she said. “As volume escalated, production costs dropped from 2018 levels by $743 per loan.”

On the negative side, Walsh said that prepayment activity from refinancing triggered heavy amortization and write-downs for companies holding mortgage servicing rights (MSRs), especially if they didn’t hedge those rights. But she also noted that profits on the production side generally made up for servicing losses: taking both production and servicing operations into account, 92% of firms posted pre-tax net profits in 2019. That’s up from just 69% the previous year.

Of course, with the current landscape looking more and more unkind to IMBs by the day, the profitable days of 2019 may seem like far too long ago.

“For many IMBs, 2019 is now a distant memory because of the mortgage market disruption caused by the ongoing COVID-19 pandemic,” Walsh said. “The many pain points right now for IMBs include liquidity constraints, volatility in the secondary markets, capacity issues from heightened refinance activity, mortgage origination obstacles due to social distancing, and escalating forbearance activity. All of these challenges could factor into the future profitability of many IMBs.”