Ellie Mae released a new monthly report on the state of the origination market. The report draws its data and insights from a robust sampling of the significant volume of loan applications — more than 20 percent of all originations in the U.S.— that flow through Ellie Mae’s Encompass360 mortgage management software and Ellie Mae Network.
To get a meaningful view of lender “pull-through,” Ellie Mae reviewed loan applications initiated within the previous 90 days to calculate a closing rate and found that nearly 48 percent of all applications closed. There was a higher percentage of purchase mortgages closing (60 percent) than refinances (42 percent).
“In February, it appears that lenders continued to be very cautious in terms of credit quality, downpayments and valuations,” said Jonathan Corr, chief operating officer of Ellie Mae. ”The average credit score on closed loans was 750 last month, up from 740 six months ago; meanwhile, the average loan-to-value ratio was 76 percent, a decrease of 3 percent from August’s average.
Monthly Origination Overview for February 2012
| |
Month Ended
February 2012
|
Month Ended
November 2011
|
Month Ended
August
2011
|
|
Closed Loans
|
|
|
|
|
|
|
Purpose
|
|
|
|
|
Refinance
|
67 percent
|
64 percent
|
61 percent
|
|
Purchase
|
33 percent
|
36 percent
|
39 percent
|
|
Type
|
|
|
|
|
FHA
|
25 percent
|
25 percent
|
29 percent
|
|
Conventional
|
67 percent
|
67 percent
|
62 percent
|
|
Days to Close
|
|
|
|
|
All
|
44
|
46
|
40
|
|
Refinance
|
43
|
42
|
37
|
|
Purchase
|
44
|
46
|
43
|
|
ARM percent
|
4.3 percent
|
5.3 percent
|
8.3 percent
|
|
15 Year percent
|
19.6 percent
|
19.7 percent
|
18.3 percent
|
|
30 Year – Note Rate
|
4.095
|
4.258
|
4.639
|
Profiles of Closed and Denied Loans for February 2012
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Closed First-Lien Loans (All Types)
|
Denied Loans
(All Types)
|
|
FICO Score (FICO)
|
750
|
699
|
|
Loan-to-Value (LTV)
|
76
|
83
|
|
Debt-to-Income (DTI)
|
23/34
|
28/44
|
“Last month, if your FICO score was below 720 or you had a downpayment or equity of less than 25 percent, there was a good chance that your refinance application for a conventional loan was denied or you were offered a significantly less attractive interest rate,” Corr said. “The average DTI ratio for such a denial in February was 27/43.
“The timeline from application to closing for the average loan was 44 days in February and 43 for a refinance, a 10 percent and 16 percent increase, respectively, over where the industry was six months ago,” Corr added. “This tracks with the increase in demand that we saw at year end.”