Pull-Through, Processing Time, and Refinance Share Much-Improved in November

Thernpercentage of loans originated for refinancing increased in November for thernfirst time in 10 months Jonathan Corr, president and chief operating officer ofrnEllie Mae said today.  Refinancing’srnshare of loans increased six percentage points from October to 45 percent, thernhighest share since July.  Corr said, “HARP-relatedrnrefinancing activity also increased, as conventional refinances at 95%-plus LTVrnrose to 8.30% in November from 7.30% in October.  He noted that the increased activity “wasrnprobably attributable to the quarter of a point decline in the interest ratesrnon the 30-year note in November, which declined to 4.526 percent.” </p

Ellie Mae’s OriginationrnInsight Report for November shows the share of originations that werernadjustable rate mortgages increased from 5.6 percent in October to 5.8 percentrnin November.  While is still a tiny sharernof new mortgages, use of ARMs has nearly tripled in the last year, increasing fromrn2.0 percent in November 2012.</p

Ellie Mae draws its data from a sampling of the loan applicationsrnthat are handled by its mortgage management software and network.  About 20 percent of all mortgage originationsrnin the U.S. flow through that system. </p

Loans closed at a faster pace in November than in October, requiringrnan average of 42 days as compared to 45. rnProcessing time for refinances dropped by six days to 37 and purchasernmortgages took 45 days compared to 46.</p

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To get a meaningful view of lender “pull-through,”rnEllie Mae reviewed a sampling of loan applications initiated 90 days priorrn(i.e., the August 2013 applications) to calculate an overall closing rate ofrn53.1% in November, up from 51.4% in October 2013. </p

“Credit requirements also continued to loosen,” Corr added. “Thernaverage FICO score for all closed loans in November 2013 was 729, compared torn750 in November 2012. Also, 30% of closed loans had an average FICO score belowrn700 in November 2013, compared to 22% in 2012.

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