What is generally considered the most profitable activity for residential mortgage bankers?

Loan servicing is considered the most profitable activity for residential mortgage bankers because it generates a steady stream of income over the life of the mortgage through the collection of monthly payments. Servicing includes managing the loan accounts, handling customer inquiries, and ensuring that payments are processed efficiently. Additionally, mortgage bankers retain a portion of the interest paid by borrowers, which adds to the profitability.

In contrast, loan origination may provide substantial upfront profits but is often associated with higher costs and fluctuating demand based on market conditions. While investor relations and marketing new mortgage products are important for a mortgage bank's growth and stability, they do not typically produce ongoing revenue in the same way that loan servicing does.