IMB per-loan profits fell 44% in Q4 2025

"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, Marina Walsh, the MBA's vice president of industry analysis, said in a statement. Combining both production and servicing operations, 68% of mortgage companies in MBA's sample posted overall profits in the fourth quarter of 2025, a model increase of 61% one year."

"Between the third and fourth quarters of 2025, the average IMB saw production volume rise, while revenues declined and the overall cost to originate stayed relatively flat. This was tied in part to increased loan locks in September that were reported in Q3 earnings rather than in Q4, which follows relevant accounting rules."

"The MBA also explained that increased markdowns and amortization from payoffs across mortgage servicing rights (MSR) portfolios made a dent in profits across origination and servicing business lines from October through December. The trade group's quarterly Mortgage Bankers Performance Report relied on data from 338 companies in the nonbank sector."

Mortgage banking profitability showed year-over-year improvement in the fourth quarter of 2025, with net production profits averaging 17 basis points compared to losses of 4 basis points in the same period of 2024. Sixty-eight percent of mortgage companies in the MBA's sample achieved overall profits when combining production and servicing operations, up from 61% one year prior. However, production profits declined from the third quarter of 2025, driven by increased loan locks in September recorded in Q3 earnings and markdowns from mortgage servicing rights portfolios. The MBA's analysis covered 338 nonbank companies, with 81% being independent mortgage banks. Average pretax production profit reached 17 basis points in Q4 2025, down from 33 basis points in Q3 but above the historical average of 39 basis points since 2008.

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