(Bloomberg) -- American mortgage firms lost on average $118 on each loan originated in the first quarter, according to data from the Mortgage Bankers Association, as business slowed, expenses increased and the Federal Reserve nudged its benchmark rate higher.
Falling volume dragged net production profitability into the red for only the second time since the trade group introduced the report a decade ago, said Marina Walsh, MBA’s Vice President of Industry Analysis. Total production expenses rose to $8,957 per loan, the highest in the history of the report, Walsh said.
Worker costs are adding pressure. Personnel expenses rose by 6.1 percent in the first quarter to $5,899 per loan. Separate Labor Department employment data show the number of loan brokers declined for the second month in a row in April. With declining profits and rising costs, more job losses could be inevitable:
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