It's an amazing statistic, in this year of amazing statistics!
In 2007, at least 100,000 mortgage professionals lost their jobs as Mortgage Market Turmoil grew involved. Loan Originators, Processors, Closers, Support Staff - few, if any, are immune from possible cutbacks.
Last quarter alone, an estimated 9,000 mortgage practitioners nationwide were let go.
Further, according to a recent survey by Mortgage Bankers Association, the average mortgage company lost $560 on every loan they originated in 2007. Compare that figure to robust 2003, when the average loan closed generated $1,272 in profit.
But the average Mortgage Company is still operating at a profit - if even a small one!
Of 180mortgage lenders just surveyed by the ABA, their average pre-tax net income was just over $1 Million. Back in 2006, at the height of the housing boom in most markets, the average mortgage company earned $6.4 Million pre-tax.
(Keep in mind the mortgage lending community is not only comprised of banks. A substantial share of loans were originated by thousands of independent "Mortgage Brokers" over the last decade.)
How will lenders be impacted by the $700 Billion Financial Rescue Package just enacted? Will removing bad debt from the books of lenders, through government acquisition of shaky mortgage debt, encourage renewed lending to homeowners, and industry growth?
It's possible, of course - but that will likely take a while! And, the important factors of staggering inventory and declining home prices in Chicago and elsewhere, combined with tougher lending standards resulting in fewer mortgage loans written, will have to come into balance as well.
For more info, as well as a link to Mary Umberger's Real Estate Column in yesterday's Chicago Tribune, see our post from yesterday @ BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO
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