Loan Processing Time Increases to 54 Days for Refi's

by devteam November 19th, 2012 | Share

Applicationsrnfor mortgage refinancing encountered increased processing time again in Octoberrnwhen it took an average of 54 days to close a loan, an increase of four days sincernSeptember, according to the Ellie Mae’s Origination Insight Report released Monday.  This is ten days longer than the average timernto process an application for a purchase mortgage and is an increase of 11 daysrnover the last 12 months.</p

Ellie Mae reports that the share ofrnrefinancing increased from a 65 percent of all closed loans in both Septemberrnand in October, 2011 to 69 percent in October 2012.  The share of loans attributed to FHA was 19rnpercent, unchanged from the previous month but down from 24 percent a yearrnearlier.</p

To get a meaningful view of lender “pull-through,”rnEllie Mae reviewed a sampling of loan applications initiated 90 days priorrn(i.e., the July applications) to calculate an overall closing rate of 54.5% in Octoberrn2012, compared to 50.5% in September 2012. rn</p

Closing rates have improved substantially over thernlast 12 months, the period for which Ellie Mae provided data for thisrnmetric.  In October thernrate for refinances was 51.3%, up from 43.3% in November 2011and the closingrnrate for purchase applications went from 55.2 percent to 61.2 in the samernperiod.</p

Jonathan Corr, chief operating officer ofrnEllie Mae said increased closing rate combined with record low interest rates</awere responsible for the increased closing time for refinance applications</p

Loan profiles were essentially unchanged from September as well as acrossrnthe preceding year.  The average FICOrnscore of a closed loan was 750, the loan-to-value ratio was 78 percent and therndebt to income ratio was 23/34. </p

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

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