Refinances Increase to 47 Percent of Closed Loans in October, According to October Origination Insight Report from Ellie Mae
November 16 2016 - 09:00AM
Business Wire
Low 30-year note rate drives refinance
activity, closing rates increase to 73 percent
Refinances increased in October, representing 47 percent of all
closed loans in the month 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 percentage of FHA
refinances increased to 21 percent in October, up from 19 percent
in September, and VA refinances increased to 31 percent, up from 27
percent in September. Conventional refinances also increased to 57
percent, up from 56 percent in September. Refinances were bolstered
by the low 30-year note rate, which increased slightly to 3.760 in
October, up from a historic low of 3.750 in September.
Closing rates for all loans increased to 73 percent, the highest
level in 2016. This is up from 71.8 percent in September. Refinance
closing rates increased to 68 percent in October, up from 66.4
percent in September. Purchase closing rates also increased to 77.2
percent in October, up from 76.4 percent in September.
The average time to close all loans remained unchanged in
October at 48 days. The time to close a purchase decreased to 46
days while the time to close a refinance held at 50 days. The
average time to close an FHA loan decreased to 48 days in October,
down from 49 days in September, while time to close an FHA
refinance held at 51 days. Time to close an FHA purchase loan
decreased to 47 days.
Average FICO scores decreased slightly in October to 730, down
from 731 in September. Conventional purchase FICO scores decreased
to an average 753 in October, and conventional refinance average
FICO scores decreased to 745.
“Refinance activity represented 47 percent of closed loans in
the month, up from 45 percent in September,” said Jonathan Corr,
president and CEO of Ellie Mae. “We saw increases in refinance
percentages for FHA, VA and conventional loans, bolstered by the
very low 30-year note rate that rose only slightly to 3.760. We
believe that homebuyers are taking advantage of the continued low
rates to find monthly savings by refinancing their mortgages.”
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 mortgage applications submitted by
millennials 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 October report:
- Time to close a VA loan increased to 52
days.
- The Debt-to-Income (DTI) ratio for all
closed loans remained at 24/37, and the Loan-to-Value (LTV) ratio
remained at 78.
MONTHLY ORIGINATION OVERVIEW FOR
OCTOBER 2016
Oct. 2016* Sept. 2016*
6 Months Ago 1 Year Ago
(Apr.
2016*) (Oct. 2015*) Closed Loans
Purpose Refinance 47% 45%
40%
44%
Purchase 53%
54% 59% 55%
Type FHA
20% 20% 23%
23%
Conventional 68% 68%
64% 64%
VA 9%
9% 9% 9%
Days to Close
All 48 48 44
46
Refinance 50 50
44 45
Purchase 46
47 45 46
Percentage of ARM and Fixed Loan
Volume
ARM % 4.0% 4.0%
4.5% 5.4%
30-Year Rate Average
3.76% 3.75% 4.10%
4.25%
*All references to months should be read
as month ended.
PROFILES OF CLOSED LOANS FOR OCTOBER
2016
Closed First-Lien Loans
(All Types) FICO Score (FICO)
730
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 July 2016 applications—to calculate an overall closing rate of
73 percent in October 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.
© 2016 Ellie 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/20161116005502/en/
Ellie Mae, Inc.Erica Harvill,
925-227-5913Erica.harvill@elliemae.comorAllison+PartnersAlexandra
Gardell Kreuter, 646-428-0618EllieMae@allisonpr.com
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