PLEASANTON, Calif.--(BUSINESS WIRE)--Time to close all loans remained steady at 44 days 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 a purchase also remained steady at 45 days in April, while the time to close a refinance increased to 44 days in April, up from 41 days in March. Similarly, the average time to close FHA loans increased from 44 days in March to 45 days in April. Time to close VA loans remained steady at 48 days.
Closing rates for all loans decreased to 69 percent in April, down from the high of 71 percent in March. Refinance closing rates decreased to 65 percent in April, down from 66 percent in March, while purchase closing rates fell to 73 percent, down from 75 percent in March.
In terms of loan purpose, purchases increased to 59 percent of all closed loans, up from 55 percent in March.
Ellie Mae’s new FICO distribution charts in the April Origination Insight Report showed that 68 percent of purchases and 69 percent of refinances had FICO scores of 700 or above. Thirty-one percent of purchases had a FICO score between 600–699, while only 26 percent of refinances had FICO scores between 600–699. Conventional loan FICO distribution showed 81 percent of scores above 700, while FHA FICO distribution showed only 39 percent of FICO scores over 700 and 56 percent of FHA loans with FICO scores between 600 and 699.
“Days to close a loan remained steady at 44 days in April,” said Jonathan Corr, president and CEO of Ellie Mae. “Additionally, while our FICO distribution charts show that approximately 68 percent of average FICO scores for both refinances and purchases in April were above 700, we’re seeing purchase credit availability with 31 percent of FICO scores in the 600–699 range.”
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® 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.
Other findings from the April report:
- The average 30-year rate for all loans decreased from 4.12 in March to 4.10 in April.
- Debt-to-Income (DTI) remained steady at 25/38 and Loan-to-Value (LTV) stayed at 80.
MONTHLY ORIGINATION OVERVIEW FOR APRIL 2016
|April 2016*||March 2016*||
6 Months Ago
1 Year Ago
|Days to Close|
|Percentage of ARM and Fixed Loan Volume|
*All references to months should be read as month ended.
PROFILES OF CLOSED LOANS FOR APRIL 2016
Closed First-Lien Loans
|FICO Score (FICO)||723|
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 January 2016 applications—to calculate an overall closing rate of 68.9 percent in April 2016 (see full report).
About the Ellie Mae Origination Insight Report
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 pulled from Ellie Mae’s Encompass origination platform. 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 (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.
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