Mortgage Loan Losses Increase, MBA Says

Washington, DC, Oct. 7, 2008--U.S. mortgage companies lost an average $560 on every loan originated in 2007 as operating expenses rose, the Mortgage Bankers Association said on Tuesday.

The loss per loan is up from $50 on 2006, and extends a downward trend that began in 2004, the MBA said in its annual cost study.

While loan origination and ancillary fees grew on a per-loan basis, they did not keep pace with increases in production operating expenses, which grew seven percent to $3,663 per loan.

“Once again, the drop in gross production operating expenses did not keep pace with the drop in volume,” said Marina Walsh, associate vice president of economics and research of the Mortgage Bankers Association. “As a result, production profits declined in 2007, a continuation of a downward trend that began in 2004.”