Ellie Mae said today that loans for refinancing
represented only 47 percent of loans originated in July, dropping from 51
percent in June and representing less than half of all loans for the first time
since the company began reporting the data in August 2011. Refinancing had a 62 percent average market
share for all of 2012 while purchase loans, which rose to 53 percent from 49
percent in July averaged 38 percent for 2012.
Corr, Ellie Mae's president and chief operating officer noted the decline in
refinancing but said the increase in purchase loans is a further indication
that housing is improving. "One
part of the refinance market, HARP-related high LTV refinances (95% or more),
had a resurgence, rising more than three percent to 11.1% in July 2013, compared
to 8.0% in June 2013," he noted.
FHA-backed loans held steady at 19 percent of
originations for the third straight month while conventional mortgages were at
71 percent for the second month. FHA
loans averaged 23 percent of all originations in 2012 and had as high as a 28
percent share in March and April 2012.
The average time to close a loan in July was 47 days
with loans for refinancing taking an average of 48 days, two more than the
average loan for a home purchase.
To get a meaningful view of lender
"pull-through," Ellie Mae reviewed a sampling of loan applications initiated 90
days prior (i.e., the April 2013 applications) to calculate an overall closing
rate of 55.4% in July 2013, up from 54.3% in June 2013.
Seventy-five percent of closed loans
had an average FICO score over 700 compared to 83 percent of loans a year
ago. The average debt-to-income ratio
rose from an average of 23/34 for all of 2012 to 24/36 in July and the loan-to-value
ratio is up two percentage points from the beginning of the year.
"Credit standards continued to ease
in July," said Corr. "The average FICO score fell to 737, from 742 in June
2013, and it is now at the lowest level since we began our tracking in August
2011. Similarly we saw slight increases in both loan-to-value and
debt-to-income ratios last month-signs that lenders are willing to accept
slightly more risk to maintain volume.
mines its data from a sampling of approximately 44 percent of loans initiated
on its proprietary origination platform.
Those loans represent about 20 percent of all U.S. loan applications.