As Purchase Market Leads the Way, Time to Close Shrinks According to Latest Origination Insight Report from Ellie Mae
March 15 2017 - 9:00AM
Business Wire
FICO scores drift downward in
February
Home loans for purchases increased to 57 percent in February, up
from 53 percent the month prior, 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 average time to close all loans decreased to 46 days in
February, down from 51 days in January. Similarly, the time to
close a refinance dropped to 47 days from 53 days the month prior,
and time to close a purchase dropped to 45 days, down from 48 days
in January.
As the 30-year note continued to rise in February, average FICO
scores dropped with the average FICO score on all closed loans at
720. Conventional refinance FICO scores dropped to 728 in February,
down from 732 in January. FHA refinance FICO scores dropped to 649
in February, down from 651 in January. VA refinance FICO scores
dropped five points to 702 in February. FICO scores on purchases
stayed consistent from the month prior with FHA purchase FICO
scores at 686, conventional purchase at 752 and VA purchase at
707.
Closing rates for all loans decreased to 70.6 percent, down from
72.2 percent in January. Refinance closing rates decreased to 65.4
percent, down from 67.9 percent the month prior, and purchase
closing rates decreased from 76.8 percent in January to 75.9
percent in February.
“The purchase market led the way in February, representing 57
percent of total closed loans,” said Jonathan Corr, president and
CEO of Ellie Mae. “Along with the growing purchase market, we’re
seeing the time to close all loans decrease and FICO scores
decline, trends that we will continue to watch in the coming
months.”
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 data from 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.
MONTHLY ORIGINATION OVERVIEW FOR
FEBRUARY 2017
Feb. 2017* Jan. 2017* 6
Months Ago 1 Year Ago
(Aug. 2016*) (Feb. 2016*)
Closed Loans Purpose Refinance 43%
47% 43% 46%
Purchase 57%
53% 56% 52%
Type FHA 23%
21% 20% 22%
Conventional 63% 66%
68% 65%
VA 10% 9% 9%
9%
Days to Close All 46 51
46 46
Refinance 47 53 46
44
Purchase 45 48 46 48
Percentage of ARM and Fixed Loan Volume ARM %
5.3% 5.4% 4.1% 5.1%
30-Year Rate
Average 4.36% 4.31% 3.77% 4.22%
*All references to months should be read as month ended.
PROFILES OF CLOSED LOANS FOR FEBRUARY
2017
Closed First-Lien Loans (All
Types) FICO Score (FICO) 720
Loan-to-Value
(LTV) 79
Debt-to-Income (DTI) 25/40
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 November 2016 applications—to calculate an overall closing rate
of 71 percent in February 2017 (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.
© 2017 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®,
the Ellie Mae logo and other trademarks or service marks of
Ellie Mae, Inc. appearing herein are the property 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/20170315005357/en/
Ellie Mae, Inc.Erica Harvill,
925-227-5913Erica.harvill@elliemae.comorAllison+PartnersAlexandra
Gardell Kreuter, 646-428-0618EllieMae@allisonpr.com
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