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Volume 18 - Number 7

April 4, 2014

Profit Margins Squeezed in Late 2013

Mortgage bankers reported sharp declines in profitability during the fourth quarter, and only a little more than half of them said they were profitable at all, according to the Mortgage Bankers Association’s latest performance report. The average pretax income reported by participating companies fell 58.9 percent from the third quarter to $681,000, the MBA said. Only 57.9 percent of the lenders said they had positive pretax income for the period. Back in the fourth quarter of 2012, 93.5 percent of lenders said they were profitable. And the average ratio of pretax income to equity shriveled to just 51 basis points in the fourth quarter, compared to 12.2 percent in the third quarter and 63.4 percent a year ago.

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