“After a series of volatile quarters since 2021, mortgage companies delivered healthier results in the third quarter,” said Marina Walsh, MBA’s vice president of industry analysis. “Combining both production and servicing operations, roughly 85% of the more than 325 mortgage companies in our sample posted overall profits.
“While third-quarter closed loan volume was relatively flat, and per-loan production expenses rose slightly compared to the second quarter, the increase in recorded production revenue drove profits higher in the third quarter,” she added.
Walsh noted that there was a surge in loan applications that locked in September and were recognized in earnings for the quarter. Most of these locks will be reflected as closed loan volume in Q4 2025, along with mark-to-market revenue adjustments, MBA confirmed.
The average pretax production profit rose to 33 basis points (bps), up from 25 bps in the second quarter. That remains below the long-term quarterly average of 40 bps. Total production revenue increased to 359 bps, compared with 346 bps in the prior quarter.
On a per-loan basis, revenue climbed to $12,310, up from $11,914.
But expenses also edged higher. Total loan production costs rose to 326 bps, up from 321 bps. Per-loan costs increased to $11,109, up from $10,965, and remained well above the long-term average of $7,799 per loan since 2008.
The average production volume per company decreased to $634 million, down from Q2 2025’s figure of $636 million, although loan count ticked up slightly to 1,866, up from 1,862. The average first mortgage loan size fell to $373,414, down from $374,151.
Purchase loans made up 82% of first mortgage originations by volume, compared with an estimated industrywide figure of 67%.
In servicing, net financial income was $29 per loan, nearly unchanged from $30 in the previous quarter. Operating income improved slightly to $92 per loan, up from $90.
Overall, 85% of firms reported pretax financial profits across their production and servicing divisions, up from 80% in the second quarter.
