After it jumped up by three full days
in November the average time to close a first mortgage loan stabilized in
December at 49 days. The November increase had been attributed to unfamiliarity
with the new Truth in Lending Disclosure Rule (TRID) which went into effect for
loans for which applications were received after October 3.
Ellie Mae's Origination Insight Report showed that purchase mortgage closings
did take one day longer, 50 days, to close in December but that was offset by a
drop in closing times for refinances from 49 to 47 days. The average time to close FHA and
conventional loans remained largely unchanged at 49 days, while for VA loans it
increased from 50 to 52 days.
Jonathan Corr, president and CEO of
Ellie Mae said that the company's customers are certainly impacted by TRID. He
commented, "While the time to close loans remained consistent from November,
the 49-day cycle is still a week longer than the time to close at this same
time last year."
Purchase loans represented 56 percent
of all closed loans while refinances as a percentage of lenders' overall loan
volume decreased for the first time in seven months from 46 percent in November
to 43 percent in December.
Conventional loans made up 65 percent
of loans closed in December and FHA loans 22 percent. VA loans had a 9 percent share. The purchase share of conventional loans rose
from 43 to 45 percent while the purchase shares of FHA and VA loans rose from
73 to 79 percent and 67 to 74 percent respectively.
Ellie Mae's data also shows that the
average FICO score on closed loans increased for the first time since May from
720 in November to 722 in December, while the average FHA refinance FICO score
increased to 651, up from 648 in November.
Sixty-seven percent of all loans
applied for over a 90 day cycle closed in December, down one point from
November when the closing rate was the highest of 2015. Closing rates on refinances were the highest
of the year at 63 percent while purchase closings eased back 1 point to 71
percent. The lowest closing rate was for
VA refinances at 43.5 percent.
Ellie Mae takes its application data
from approximately a two-thirds sample of all mortgage applications originated
on its mortgage management software.