Mae's Origination Insight Report for
February noted a distinct drop in the share of loans originated for refinancing
during the month. After spiking to 73
percent in January, the highest share in the Report's 18-month history, it
settled back into the more normal range of 68 percent. Purchase originations had a 32 percent share. Conventional loans made up 71 percent of the
total loans in Ellie Mae's sample, down from 74 percent in January and FHA
loans had a 20 percent share compared to 18 percent the previous month.
Ellie Mae placed the "pull through" or closing rate
for February at 56.8 percent, up from 55.0 percent in January. To obtain this rate the company reviews a
sampling of loan applications initiated 90 days earlier, in this case in November
2012, to see how many had closed. Despite
frequent course changes the closing rate has trended higher since the first sampling
in August 2011 when the rate was 47.1 percent.
Jonathan Corr, president and CEO of Ellie Mae said there was slight
easing in February in average FICO scores, loan-to-value ratios (LTV) and debt-to-income
ratios (DTI) for closed loans. "The average FICO dropped from 749 in January
2013 to 745 in February 2013, the lowest point since May 2012. Meanwhile, the
average loan-to-value hit 80% for the first time since July 2012 and the
backend debt-to-income ratio was 35% for the first time since June 2012--suggesting
that the credit box may be expanding."
Corr added, "HARP 2.0 continues to show traction with conventional
refinances at 95%-plus LTV rising for the sixth month in a row to 12.1% in
February 2013, the highest level since we began tracking in October 2011."
The time required to close loans improved with the average time
dropping to 50 days in February from 54 days in January. Refinancing went from an average of 55 days
to 51 while purchase loans required 47 days compared to 51 in January.
Ellie Mae draws its data from a sampling of the loan applications - three
million in 2012 or more than 20% of all originations in the United States - that
flow through its management software and proprietary network.