Latest Ellie Mae Origination Insight Report Suggests There Still May Be Life in Refis
October 23 2014 - 4:15PM
Business Wire
Percentage of refinances increases for first
time in 2014, though closing rate on mortgage refinancings falls
nearly 6 percent
Refinancings as a percentage of overall mortgage volume jumped 3
percent from August to account for 36 percent of closed loans in
September, according to the latest Origination Insight Report
released by Ellie Mae® (NYSE:ELLI), a leading provider of
innovative on-demand software solutions and services for the
residential mortgage industry. The September 2014 report also found
the closing rate on mortgage refinancings fell nearly 6 percent to
48.3 percent in September, the lowest since February.
The Origination Insight Report mines its application data from a
robust sampling of approximately 57 percent of all mortgage
applications that were initiated on the Encompass® origination
platform. The Origination Insight Report is considered a strong
proxy of the underwriting standards that are being employed by
lenders across the country.
“It appears there may be life left in the refi market, as a
number of consumers are still taking advantage of recovering equity
in their homes and low interest rates to knock down their mortgage
payments,” said Jonathan Corr, president and COO of Ellie Mae.
The percentage increase in refinancing activity was the first
monthly increase in 2014, the report found. Among other findings in
the report:
- The average 30-year interest rate for
all loans dropped for the fifth straight month to 4.381%, the
lowest rate since July 2013
- The average number of days to close a
loan climbed above 40 days for the first time since June
- The average number of days to close
purchase loans rose 3 days from August to September
“While rates continue to fall, loans have been taking slightly
longer to close since the peak of the summer buying season,” Corr
said. "It will be interesting to see whether these trends continue
as we head into the winter, a traditionally slower time for housing
sales."
MONTHLY ORIGINATION OVERVIEW FOR
SEPTEMBER 2014
September 2014* August
2014* 6 Months Ago
(March 2014*)
1 Year Ago
(Sept. 2013*)
Closed Loans Purpose Refinance
36% 33% 40% 42%
Purchase 63% 66%
60% 58%
Type FHA 19%
20% 22% 19%
Conventional 64% 64%
65% 70%
VA 12%
12% - -
Days to Close
All 41 39 40
42
Refinance 40 39
37 40
Purchase 41
38 41 43
ARMs vs.
Fixed / Length / Rate ARM % 6.3%
6.2% 7.4% 5.5%
15 Year %
9.1% 9.1% 12.4%
15.5%
30-Year
Note Rate
4.381% 4.386% 4.604%
4.761%
*All references to months should be read as month ended.
PROFILES OF CLOSED AND DENIED LOANS FOR
SEPTEMBER 2014
Closed First-Lien Loans (All Types)
Denied Loans
(All Types)
FICO Score (FICO) 726 694
Loan-to-Value
(LTV) 82 81
Debt-to-Income (DTI)
24/37 28/45
More information and analysis of closed and denied loans by loan
purpose and investor are available in the full report at
http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/.
To get a meaningful view of lender pull-through, Ellie Mae
reviewed a sampling of loan applications initiated 90 days prior
(i.e., the June 2014 applications) to calculate an overall closing
rate of 58.1percent in September 2014 (see full report).
About the Ellie Mae Origination Insight Report
In 2013, approximately 3.5 million loan applications ran through
Ellie Mae's Encompass mortgage management solution. The Origination
Insight Report mines its application data from a robust sampling of
approximately 57 percent of all mortgage applications that were
initiated on the Encompass origination platform. Given the size of
this sample and Ellie Mae’s market share, the Company believes the
Origination Insight Report is a strong proxy of the underwriting
standards that are being employed by lenders across the
country.
The Origination Insight Report focuses on loans that closed or
were denied in a specific month and compares their characteristics
to similar loans that closed or were denied three and six months
earlier. The closing rate is calculated on a 90-day cycle rather
than on a monthly basis because most loan applications typically
take one and a half to two months from application to closing.
Loans that do not close could still be active applications or
applications withdrawn by consumers or denied for incompleteness or
nonqualification.
The Origination Insight Report details aggregated, anonymized
data and does not disclose client-specific or proprietary
information.
News organizations have the right to reuse this data, provided
that Ellie Mae, Inc. is credited as the source.
About Ellie Mae
Ellie Mae (NYSE:ELLI) is a leading provider of innovative
on-demand software solutions and services for the residential
mortgage industry. Ellie Mae’s all-in-one Encompass® mortgage
management solution provides one system of record that allows
banks, credit unions and mortgage lenders to originate and fund
mortgages and improve compliance, loan quality and efficiency.
Visit EllieMae.com or call 877.355.4362 to learn more.
© 2014 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®,
DataTrac®, Ellie Mae Network™ Total Quality Loan™, TQL™ and
the Ellie Mae logo are registered trademarks or trademarks of
Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other
company and product names may be trademarks or copyrights of
their respective owners.
Strategic Vantage Mortgage Public RelationsWarren Lutz,
925-899-9773WarrenLutz@StrategicVantage.comMike Murray,
240-498-0863MikeMurray@StrategicVantage.com
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