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Production revenues fell for the third consecutive quarter, down from 408 bps to 375 bps. On a per-loan basis, production revenues were down from $11,325 for each loan to $10,691 per loan. Meanwhile, total loan production expenses (commissions, compensation, occupancy, equipment, and other production expenses and corporate allocations) rose from $7,964 per loan in Q1 to $8,668 per loan in Q2.

Walsh said that this “is a strong indication that the industry is moving away from the record-high profits of 2020.”    

She added that servicing profitability also plunged from $154 per loan to just $7 per loan during the quarter due to mortgage servicing right (MSR) markdowns and increased operating expenses. Combining production and servicing operations, 85% of firms posted overall profitability for Q2, compared to 97% in Q1.

The average production volume was $1.35 billion per company in the second quarter, down from $1.44 billion per company in the first quarter. The average volume by count per company also declined, down from 4,879 loans to 4,615 loans quarter over quarter.