Low Rates Stabilize Refinancing Share of Originations


Refinancing held on to a 35 percent share of mortgage
in April according to the Origination Insight Report from Ellie
Mae as the 30-year note rate dropped for the fourth consecutive month.  The rate was at its highest so far at 5.01 percent in January.  The
April average was 4.61 percent.

The share of refinancing was little changed from March
for any of the loan types and ranged from 38 percent for conventional loans to
23 percent for those backed by FHA.

The time to close loans continues to
shrink, dropping two days to 40.  Time to
close a refinance was 33 days, down from 34 in March and 43 compared to 45 for
purchase loans.

“We are seeing closing times drop
across the board as our lenders leverage technology for a more efficient and
streamlined loan origination process,” said Jonathan Corr, president and CEO of
Ellie Mae. “And as the 30-year note rate continues to decline and closing rates
remain high, we expect to see an active spring home buying cycle.”

The share of loans across product
types has changed little in many months but the share of conventional loans did
increase two points in April
to 66 percent, picking up one point from VA loans
and one from the “other” category.  Their
shares dropped to 10 percent and 4 percent respectively.  FHA accounted for the remaining 20 percent,
unchanged from March.  The percentage of
ARMs originated decreased from 7.4 percent in March (and 8.2 percent in
February) to 6.8 percent.

The closing rate dropped to 74.8
percent, down from 75.3 percent in March. 
Ellie Mae calculates closing rates from a sample of loan applications
initiated 90 days earlier, in this case in January 2019.

The Origination Insight Report
is based on data from a sampling of approximately 80 percent of all mortgage
applications that were initiated on the company’s proprietary mortgage
system.  The company states the report is
a strong proxy for the underwriting standards employed by lenders across the

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