Mortgage Profit Tumbles
This is as scientific as we are going to get from the mortgage industry. In a comprehensive poll the profits are reported to be disappearing on many levels. That overall revenue is way down from the 2003 blowout is not news if you check out this blog. But if you go through the details you find that each mortgage processed has lower profit margins as well. "The average retail profit margin declined to 42 bps in the first half of 2004 from 100 bps in 2003. This translates into pre-tax net income of $760 per loan (annualized) in 2004 compared with $1,555 per loan in 2003. While retail revenues were flat in 2003 and 2004, the cost-to-produce (fully loaded) increased by 26 percent to $3,766 per loan".