PLEASANTON, Calif.,
Nov. 18, 2020 /PRNewswire/ --
Interest rates dropped below three percent for the first time since
Ellie Mae began tracking this data in 2011, hitting 2.99 percent in
October, down from 3 percent on all loans the month prior. This is
according to the latest Origination Insight Report from
Ellie Mae®, the leading cloud-based loan origination
platform provider for the mortgage industry and now ICE
Mortgage Technology, a division of Intercontinental Exchange, Inc.
(NYSE: ICE). The 30-year note rate for VA loans dropped to 2.75
percent, down from 2.78 in September, putting it well below the
3.00 percent mark. The 30-year rate on FHA loans held steady at
3.01 percent for the second month while Conventional rates dropped
to 3.01 percent, down from 3.02 percent the month prior.
Refinances continued to rise, reaching 60 percent of total
closed loans in the month, well above the 2019 high of 51 percent
that also occurred in October. Purchase loans dropped to 40 percent
of all closed loans in the month down two percentage points from
the month prior. Conventional loans ticked back up in October,
representing 82 percent of all closed loans in the month, up from
80 percent in September.
Other statistics of note in October included:
- The time to close all loans increased to 54 days in October, up
from 51 days in September. Time to close for purchase loans
increased to 48 days in October, up from 47 days in September. Time
to close for refinances increased to 57 days in October, up from 54
days in September.
- The FICO score average for all loans held for the second
straight month at 753.
- Closing rates decreased slightly to 76.7 in October, down from
77.1 in September.
"We are continuing to see interest rates decline now dipping
below three percent for the first time since we have tracked this
data," said Joe Tyrrell, president,
ICE Mortgage Technology. "The market clearly remains ripe for
refinances as 60 percent of all closed loans are refis this month,
indicating that homeowners are still looking to capitalize on the
opportunity to reduce their monthly payments."
Tyrrell continued, "FICO scores remain high and conventional
loans represent 82 percent of all closed loans this month.
Homeowners should continue to educate themselves on the various
available products to determine what best fits their needs. We will
watch to see how the data shifts as we continue into the fall and
the global pandemic and election impact the economic outlook."
The Origination Insight Report mines data from a robust
sampling of approximately 80 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.
In addition to the Origination Insight Report, Ellie Mae
also distributes data from its monthly Ellie Mae Millennial
Tracker on the first Wednesday of each month. The Ellie Mae
Millennial Tracker focuses on mortgage applications submitted by
borrowers born between the years 1980 and 1999.
Ellie Mae also offers Ellie Mae Insights™, the only analytics
solution in the market that provides peer benchmarking comparison
analysis in near real time. Ellie Mae Insights analyzes key metrics
such as efficiency levels, operational costs, rates and market
penetration, demographic data and pull through rates to help
lenders of all sizes to make informed decisions.
MONTHLY ORIGINATION OVERVIEW FOR OCTOBER 2020
|
October
2020*
|
September
2020*
|
6 Months
Ago
(April
2020*)
|
1 Year
Ago
(October
2019*)
|
Closed
Loans
|
Purpose
|
Refinance
|
60%
|
58%
|
65%
|
51%
|
Purchase
|
40%
|
42%
|
35%
|
49%
|
Type
|
FHA
|
10%
|
10%
|
10%
|
16%
|
Conventional
|
82%
|
80%
|
81%
|
73%
|
VA
|
5%
|
6%
|
6%
|
8%
|
Days to
Close
|
All
|
54
|
51
|
42
|
44
|
Refinance
|
57
|
54
|
39
|
39
|
Purchase
|
48
|
47
|
46
|
47
|
Percentage of ARM
and Fixed Loan Volume
|
ARM
%
|
2.4%
|
2.5%
|
3.8%
|
5.0%
|
30-Year
Rate
|
Average
|
2.99%
|
3.00%
|
3.48%
|
3.94%
|
|
*All references to
months should be read as month ended.
|
PROFILES OF CLOSED LOANS FOR OCTOBER
2020
|
Closed First-Lien
Loans
(All Types)
|
FICO Score
(FICO)
|
753
|
Loan-to-Value
(LTV)
|
73
|
Debt-to-Income
(DTI)
|
23/35
|
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 2020 applications—to
calculate an overall closing rate of 76.7 percent in October 2020 (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. 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,
de-identified 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, now a part of ICE Mortgage
Technology, a division of Intercontinental Exchange, Inc. (NYSE:
ICE), is the leading cloud-based loan origination platform provider
for the mortgage industry. Ellie Mae's technology solutions
enable lenders to originate more loans, lower origination costs,
and reduce the time to close, all while ensuring the highest levels
of compliance, quality, and efficiency. Visit EllieMae.com or
call (877) 355-4362 to learn more.
© 2020 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®,
Mavent®, Velocify®, Capsilon®, 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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SOURCE Ellie Mae