Lenders Managed Quick Closings despite Refi Surge

February was the second month in a row that refinancing madernup more than half of all mortgage originations. rnEllie Mae’s latest OriginationrnInsight Report said that the refinancing share of originations jumped 8rnpercent from the January level to comprise 59 percent of lenders’ loanrnvolume.  Refinancing had averaged a 38rnpercent share throughout 2014, never rising above 50 percent after reaching arnhigh water market of 47 percent in January of that year.  Despite the spike in refinancing lenders tookrnan average of 36 days to close those loans, the shortest timeframe since ElliernMae began tracking that data in August 2011.</p

“The drop in the average 30-year fixedrnrate in last few months has kept lenders busy with increased refinancernbusiness,” said Jonathan Corr, president and CEO of Ellie Mae. “Considering therndemand, the fact that lenders are taking fewer days to close the average refirnloan is very good news.”</p

Conventional loans made up 69 percent of originations inrnFebruary with 68 percent of those loans refinances.  FHA loans had a 19 percent share, but thernmajority of those, 63 percent, were for home purchases.  Nine percent of originations were VA-backedrnloans.  </p

Loans for purchase took an average of 40 days to close.  The average closing time for all loans was 38rndays.</p

Only 4 percent of loans carried an adjustable interest rate,rndown from 5.1 percent in January and the lowest share since at least latern2013.  The share of 15-year loans rose torn11.1 percent from 10.8 percent in January and was the highest percentage of originationsrnfor those loans since their 12.2 percent share in April 2014.</p

To get a meaningful view of lenderrnpull-through, Ellie Mae reviewed a sampling of loan applications initiated 90rndays prior-or the November 2014 applications-to calculate an overall closingrnrate of 60.0 percent in February 2015. It was the fourth consecutive month thatrnthe closing rate has been at or above 60 percent.</p

Ellie Mae’s Origination InsightrnReport mines its data from a 66 percent sample of all mortgage applicationsrnthat were initiated on the company’s Encompass® origination platform which lastrnyear managed approximately 3.7 million loan applications. 

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