Applications for mortgage refinancing encountered increased processing time again in October when it took an average of 54 days to close a loan, an increase of four days since September, according to the Ellie Mae's Origination Insight Report released Monday.  This is ten days longer than the average time to process an application for a purchase mortgage and is an increase of 11 days over the last 12 months.

Ellie Mae reports that the share of refinancing increased from a 65 percent of all closed loans in both September and in October, 2011 to 69 percent in October 2012.  The share of loans attributed to FHA was 19 percent, unchanged from the previous month but down from 24 percent a year earlier.

To get a meaningful view of lender "pull-through," Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the July applications) to calculate an overall closing rate of 54.5% in October 2012, compared to 50.5% in September 2012. 

Closing rates have improved substantially over the last 12 months, the period for which Ellie Mae provided data for this metric.  In October the rate for refinances was 51.3%, up from 43.3% in November 2011and the closing rate for purchase applications went from 55.2 percent to 61.2 in the same period.

Jonathan Corr, chief operating officer of Ellie Mae said increased closing rate combined with record low interest rates were responsible for the increased closing time for refinance applications

Loan profiles were essentially unchanged from September as well as across the preceding year.  The average FICO score of a closed loan was 750, the loan-to-value ratio was 78 percent and the debt to income ratio was 23/34.

Ellie Mae's monthly repost is compiled from a sampling of approximately 33 percent of mortgage applications originated on its proprietary platform which handles approximately 20 percent of all U.S. originations.