US Banks Lost Money On Mortgages For The First Time Since The MBA Began Keeping Records

The cost of producing a loan rose for lenders in the first quarter as they responded to stricter regulation by boosting fees and charging more for riskier loans.

US banks

Mortgages will cost you money in 2022

According to a


Mortgage Bankers Association (MBA) who noted that the average loss is

Each loan is worth $301

In 2021, the average loan profit will be $2,339, as opposed to that of this year.

According to Reuters, "The rapid increase in mortgage rates within a short time period, coupled with the extremely low housing stock and affordability issues, caused both refinance and purchase volumes to plummet." Marina Walsh, MBA’s vice president for industry analysis.

USA Today

"The profits that were so spectacular in the two previous years have been wiped out by the combination of a declining volume, lower revenue and higher cost per loan.

Since 2008, the MBA has tracked these statistics.

Mortgage rates will more than double in 2022. They briefly reached 7% in October.

Since then, rates have been reduced slightly.

In 2022, the volume of loans was 50% lower than in 2021. In 2022, the volume was $2.6 billion (8.371 loans), down from $4.9 million (16.590 loans).


Lenders are now paying more to produce a loan

Total costs, including compensation, commissions and equipment, increased from $8,664 per loan to $10,624 in 2022. USA Today

Walsh said that companies could not adapt their capacity quickly enough. The number of production workers declined, but at a slower pace than the volume of originations. In 2022, productivity fell to 1.5 closed loans per month for each production employee.

The report also notes

Refinancing applications are also down.

Most homeowners have low-interest loans. The refinancing portion of the total originations has dropped from 46% to 20% by dollar volume in 2022.

The average first-mortgage loan balance reached a

High of $323,780 by 2022

The report shows that the amount of money spent in 2021 will be up by $298,324 - the highest increase ever in a single year.