Pull-Through, Processing Time, and Refinance Share Much-Improved in November


percentage of loans originated for refinancing increased in November for the
first time in 10 months Jonathan Corr, president and chief operating officer of
Ellie Mae said today.  Refinancing’s
share of loans increased six percentage points from October to 45 percent, the
highest share since July.  Corr said, “HARP-related
refinancing activity also increased, as conventional refinances at 95%-plus LTV
rose to 8.30% in November from 7.30% in October.  He noted that the increased activity “was
probably attributable to the quarter of a point decline in the interest rates
on the 30-year note in November, which declined to 4.526 percent.”

Ellie Mae’s Origination
Insight Report
for November shows the share of originations that were
adjustable rate mortgages increased from 5.6 percent in October to 5.8 percent
in November.  While is still a tiny share
of new mortgages, use of ARMs has nearly tripled in the last year, increasing from
2.0 percent in November 2012.

Ellie Mae draws its data from a sampling of the loan applications
that are handled by its mortgage management software and network.  About 20 percent of all mortgage originations
in the U.S. flow through that system.

Loans closed at a faster pace in November than in October, requiring
an average of 42 days as compared to 45. 
Processing time for refinances dropped by six days to 37 and purchase
mortgages took 45 days compared to 46.

To get a meaningful view of lender “pull-through,”
Ellie Mae reviewed a sampling of loan applications initiated 90 days prior
(i.e., the August 2013 applications) to calculate an overall closing rate of
53.1% in November, up from 51.4% in October 2013.

“Credit requirements also continued to loosen,” Corr added. “The
average FICO score for all closed loans in November 2013 was 729, compared to
750 in November 2012. Also, 30% of closed loans had an average FICO score below
700 in November 2013, compared to 22% in 2012.

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