Mortgage lenders closed out 2025 stronger than in 2024, but their profitability dropped sharply from the previous quarter. According to the Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report:
- Profit per loan fell to $674 in Q4 2025, down from $1,201 in the previous quarter.
- This equates to 17 basis points (0.17%) of profit on the total loan amount—better than the 0.04% losses in Q4 2024.
- The decline was driven primarily by reduced revenue per loan and a drop in servicing values caused by MSR markdowns and high prepayments.
- Pre‑tax production profit fell to 17 bps, down from 33 bps in Q3 2025.
- Servicing income also slipped: lenders earned $13 per serviced loan, down from $29.
- Despite the hit, 68% of mortgage companies remained profitable when combining both production and servicing—an improvement from 61% in 2024.
Donna Schmidt, President and CEO of DLS Servicing, noted that servicing tech can reduce costly errors and staffing needs, helping profit margins.
“But technology can be costly as well. Servicers have to be wise in what technology they implement and how much time does it really save their teams,” she added.