After a four-month decline, mortgage lenders saw shares of purchase loan volumes rise in December even as mortgage rates continued to fall, according to the latest Origination Insight Report released by Ellie Mae® ELLI, a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Meanwhile, the closing rates for purchase loans ended the year at 67.1 percent, the highest level since Ellie Mae began tracking this data in August 2011.
According to the December Origination Insight Report, the average interest rate for a 30-year fixed rate mortgage dropped from 4.273% to 4.251%, finishing the year more than a quarter of a percent lower than the average rate of 4.592% in December of 2013.
“While many observers thought rates would rise last year, lenders were instead treated to at least a little more refinancing volume,” said Jonathan Corr, president and COO of Ellie Mae. “The fact that lenders are closing purchase loans at a higher rate is great news as we head toward the spring home buying season.”
The Origination Insight Report mines its application data from a robust sampling of approximately 57 percent of all mortgage applications that were initiated on the Encompass® origination platform. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
Other findings of the report include:
• The average time to close all loans rose at 42 days
• The average 30-year interest rate for all loans was .472% less than January 2014 (4.723%)
• The percentage of closed loans with a FICO score less than 700 was 31 percent, the same as one year ago
|
MONTHLY ORIGINATION OVERVIEW FOR DECEMBER 2014 |
|||||||||||||
| December 2014* | November 2014* |
6 Months Ago
(June 2014*) |
1 Year Ago
(Dec. 2013*) |
||||||||||
| Closed Loans | |||||||||||||
| Purpose | |||||||||||||
| Refinance | 43% | 45% | 33% | 46% | |||||||||
| Purchase | 56% | 54% | 65% | 54% | |||||||||
| Type | |||||||||||||
| FHA | 17% | 17% | 21% | 20% | |||||||||
| Conventional | 67% | 68% | 65% | 69% | |||||||||
| VA | 11% | 11% | 10% | - | |||||||||
| Days to Close | |||||||||||||
| All | 41 | 39 | 41 | 43 | |||||||||
| Refinance | 42 | 37 | 39 | 40 | |||||||||
| Purchase | 41 | 41 | 42 | 46 | |||||||||
| ARMs vs. Fixed / Length / Rate | |||||||||||||
| ARM % | 5.8% | 6.1% | 7.2% | 6.6% | |||||||||
| 15 Year % | 9.9% | 10.3% | 9.0% | 15.1% | |||||||||
|
30-Year
Note Rate |
4.251% | 4.273% | 4.421% | 4.592% | |||||||||
*All references to months should be read as month ended.
|
PROFILES OF CLOSED AND DENIED LOANS FOR DECEMBER 2014 |
||||||
|
Closed First-Lien Loans (All Types) |
Denied Loans
(All Types) |
|||||
| FICO Score (FICO) | 728 | 679 | ||||
| Loan-to-Value (LTV) | 80 | 80 | ||||
| Debt-to-Income (DTI) | 24/38 | 29/46 | ||||
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 September 2014 applications—to calculate an overall closing rate of 60.2 percent in December 2014 (see full report).
About the Ellie Mae Origination Insight Report
In 2014, approximately 3.7 million loan applications ran through Ellie Mae's Encompass mortgage management solution. The Origination Insight Report mines its application data from a robust sampling of approximately 66 percent of all mortgage applications that were initiated on the Encompass origination platform. Given the size of this sample and Ellie Mae's market share, the company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.
The Origination Insight Report focuses on loans that closed or were denied in a specific month and compares their characteristics to similar loans that closed or were denied 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. The report does not disclose client-specific or proprietary information.
News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.
About Ellie Mae
Ellie Mae ELLI is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Ellie Mae's all-in-one Encompass® mortgage management solution provides one system of record that allows banks, credit unions and mortgage lenders to originate and fund mortgages and improve compliance, loan quality and efficiency. Visit EllieMae.com or call 877.355.4362 to learn more.
© 2015 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network™ Total Quality Loan™, 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.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20150127006423/en/
Strategic
Vantage Mortgage Public Relations
Warren Lutz, 925-899-9773
WarrenLutz@StrategicVantage.com
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