Ellie Mae's Origination Insight Report said today that 40 percent of mortgage
loans closed in March were originated for refinancing and 60 percent for home
purchases. In February the split was
43/57 percent. The March figure was the
lowest share for refinancing since Ellie Mae began reporting the data in late
2012. Ellie Mae gathers data from a
sample representing the approximately 57 percent of all mortgage applications
that pass through its management software and systems.
Jonathan Corr, president and COO of
Ellie Mae said, "We continue to see the resurgence of a purchase-centric market
as numbers inch closer to historical levels.
Purchases increased another three percentage points in March 2014 to
represent 60 percent of loans, quite the difference from March 2013 when
purchases represented only 38 percent of loans."
Conventional loans had a 65 percent
market share and 22 percent were FHA-backed, unchanged from the previous
month. The FHA share was identical to
that in April 2013 but the convention loan share was down 3 percentage points.
While average FICO scores rose one point
in March, Ellie Mae's figures indicate that overall there has been a trend
toward loosening of that standard. There
has, however been little change in other underwriting guidelines. The average FICO score for a closed loan in
March was 725 compared to 724 in January and February, however the average FICO
score for all of 2013 was 738. The
company said that one-third of closed loans had an average score under 700
compared to 27 percent one year ago. The
average FICO score for a denied loan application was 689 in March compared to
an average of 699 in 2013.
The greatest dip in FICO scores were for
FHA refinances where the average for March was 672 compared to 698 for all of
2013. FHA purchase scores were down 11
points to 684. The average score for a
conventional refinance was 732 compared to 747 while conventional purchase
loans averaged only 4 points below the 2013 average of 759.
Corr said the increase in the average
FICO score was the first in 2014. "The
average debt-to-income ratio also tightened on both the front and backend,
falling to 24/37." The previous month
the DTI was 25/38. The average
loan-to-value ratio for last month was 82, unchanged from the previous two
months but 1 percentage point higher than all of 2013.
It took an average of 40 days to close a
loan in March, down from 41 days in February and 46 days in April 2013. Loans for refinancing took an average of 37
days, 10 days less than a year earlier, and purchase loans an average of 41
days compared to 44 days.
To arrive at a lender "pull-through"
number Ellie Mae reviewed a sampling of loan applications initiated 90 days
earlier (i.e. December 2013) to calculate an overall closing rate of 58 percent
in March, up from 55.3 percent in February 2014 and 53.2 percent in March
2013. The closing rate for refinances
was 54.6 percent compared to 47.0 percent in February and was 60.7 percent for
purchase mortgages, down from 62.0 percent.