Refinance Activity Continues in September Representing 45 Percent of Closed Loans, According to September Origination Insight...
October 19 2016 - 9:00AM
Business Wire
30-year note rate decline continues to
3.750, time to close loans creeps up to 48 days
Refinances increased to 45 percent of all closed loans in
September, up from 43 percent in August 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. Additionally, the
30-year note rate continued to decline to 3.750 in September from
to 3.770 in August.
The average time to close all loans increased to 48 days in
September, up from 46 days in August. The time to close a purchase
increased to 47 days while the time to close a refinance increased
to 50 days, the most since August 2015. The average time to close
an FHA loan increased to 49 days in September—up from 48 days in
August—while time to close an FHA refinance increased to 51 days.
Time to close an FHA purchase loan also increased to 48 days.
Closing rates for all loans decreased slightly to 71.8 percent
in September, down from 72.3 percent in August. Refinance closing
rates decreased to 66.4 percent in September, down from 67.1
percent in August, and purchase closing rates held steady at 76.4
percent in September.
FICO scores held steady in September with average FICO score of
731. Conventional purchase FICO scores held steady at 754 in
September and conventional refinance FICO scores remained at an
average of 747.
“Refinance activity continued into September, representing 45
percent of closed loans in the month,” said Jonathan Corr,
president and CEO of Ellie Mae. “We believe that given the volume
of refinances during the month, it is not surprising that the
average time to close would increase slightly from the month prior.
While all loans increased from 46 days in August to 48 days in
September, the average time to close a refinance increased to 50
days, which is the most we’ve seen in over a year.”
The Origination Insight Report mines its application data from a
robust sampling of approximately 75 percent of all mortgage
applications that were initiated on the Encompass® all-in-one
mortgage management solution. Ellie Mae believes the Origination
Insight Report is a strong proxy of the underwriting standards
employed by lenders across the country.
Ellie Mae also distributes its monthly Ellie Mae Millennial
Tracker, which focuses on millennial mortgage applications during
specific time periods. Ellie Mae defines millennials as applicants
born between the years 1980 and 1999. The Millennial Tracker will
continue to be released on the first Wednesday of each month.
Other findings from the September report:
- Time to close a VA loan increased to 51
days in September
- The Debt-to-Income (DTI) ratio for all
closed loans remained at 24/37 while the Loan-to-Value (LTV) ratio
fell to 78.
MONTHLY ORIGINATION OVERVIEW FOR SEPTEMBER 2016
Sept. 2016*
Aug.2016*
6 Months Ago(Mar. 2016*)
1 Year Ago(Sept. 2015*)
Closed Loans Purpose Refinance
45% 43% 45% 42%
Purchase 54% 56% 55% 57%
Type FHA 20% 20% 22%
23%
Conventional 68% 68% 66% 64%
VA 9% 9% 9% 9%
Days to Close All 48 46 44 46
Refinance 50 46
44 46
Purchase 47 46 45 46
Percentage of ARM and Fixed
Loan Volume ARM % 4.0% 4.1% 4.4% 5.3%
30-Year
Rate Average 3.75% 3.77% 4.12% 4.25%
*All references to months should be read as month ended.
PROFILES OF CLOSED LOANS FOR SEPTEMBER 2016
Closed First-Lien Loans (All
Types) FICO Score (FICO) 731
Loan-to-Value (LTV)
78
Debt-to-Income (DTI) 24/37
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—or
the June 2016 applications—to calculate an overall closing rate of
71.8 percent in September 2016 (see full report).
About the Ellie Mae Origination Insight Report
The Origination Insight Report focuses on loans that closed in a
specific month and compares their characteristics to similar loans
that closed 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 non-qualification.
The Origination Insight Report details aggregated anonymized
data pulled from Ellie Mae’s Encompass origination platform.
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. Mortgage lenders of all sizes use Ellie Mae’s
Encompass® all-in-one mortgage management solution, Mavent
Compliance Service, and AllRegs research, reference and education
resources to improve compliance, loan quality and efficiency across
the entire mortgage lifecycle. Visit EllieMae.com or
call (877) 355-4362 to learn more.
© 2016Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®,
DataTrac®, Ellie Mae Network™, Mavent®, Mortgage
Returns®, Prospect Manager®, Total Quality Loan®, True
CRM®, TQL®and the Ellie Mae logo are 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20161019005459/en/
Ellie Mae, Inc.Erica Harvill,
925-227-5913Erica.harvill@elliemae.comorAllison+PartnersAlexandra
Gardell Kreuter, 646-428-0618EllieMae@allisonpr.com
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