Purchase Market Heats up While Time to Close Shrinks to Shortest Duration since Early 2015, According to Latest Origination Insight Report from Ellie Mae

PLEASANTON, Calif.--()--Home loans for purchases increased to 63 percent in March, up from 57 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 43 days in March, down from 46 days in February, the shortest time to close since February of 2015. Similarly, the time to close a refinance dropped to 43 days from 47 days the month prior, and time to close a purchase dropped to 43 days, down from 45 days in February.

As the average 30-year note rose slightly in March to 4.39 percent, the percentage of Adjustable Rate Mortgages (ARMs) increased to the highest point since 2014 at 5.6 percent, up from 5.3 percent the month prior.

“The purchase market continued to heat up in March, representing 63 percent of total closed loans,” said Jonathan Corr, president and CEO of Ellie Mae. “We also saw the time to close shrink to the shortest duration since February of 2015 at 43 days across all closed loans, purchases and refinances, as Ellie Mae lenders automate more mortgage processes to improve efficiency, quality and compliance.”

The Origination Insight Report mines its application 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.

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 MARCH 2017

    Mar. 2017*   Feb. 2017*  

6 Months Ago
(Sept. 2016*)

 

1 Year Ago
(Mar. 2016*)

Closed Loans
Purpose
Refinance   37%   43%   45%   45%
Purchase   63%   57%   54%   55%
Type
FHA   23%   23%   20%   22%
Conventional   63%   63%   68%   66%
VA   10%   10%   9%   9%
Days to Close
All   43   46   48   44
Refinance   43   47   50   41
Purchase   43   45   47   45
Percentage of ARM and Fixed Loan Volume
ARM %   5.6%   5.3%   4.0%   4.4%
30-Year Rate
Average   4.39%   4.36%   3.75%   4.12%

*All references to months should be read as month ended.

PROFILES OF CLOSED LOANS FOR MARCH 2017

    Closed First-Lien Loans
(All Types)
FICO Score (FICO)   721
Loan-to-Value (LTV)   80
Debt-to-Income (DTI)   25/39

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 December 2016 applications—to calculate an overall closing rate of 70 percent in March 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.

Contacts

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.Harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com

Contacts

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.Harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com