Purchases Continue Upswing, Representing Sixty Five Percent of Closed Loans, According to June Origination Insight Report from Ellie Mae

Average time to close all loans increased, 30-year note rate dropped to lowest point in over a year

PLEASANTON, Calif. – July 20, 2016 – Purchases increased to 65 percent of all closed loans in June, up from 62 percent in May according to the latest Origination Insight Report released by Ellie Mae® (NYSE:ELLI), a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. This is the highest closed loan purchase percentage since August of 2014. Refinances represented 34 percent of closed loans in June, down from 37 percent in May. Additionally, the 30-year note rate dropped to 4.04 from 4.06 in May, the lowest point in over a year.

The average time to close all loans increased to 46 days in June, up from 45 days in May. The time to close a purchase rose to 46 days in June, up from 45 days in May, and the time to close a refinance rose to 47 days in June, up from 44 days in May. Similarly, the average time to close FHA loans rose to 47 days in June, up from 45 days in May. Time to close VA loans increased to 50 days in June, up from 49 days in May.

Closing rates for all loans decreased slightly to 69.6 percent in June, down from 70.6 percent in May. Refinance closing rates dipped to 64.7 percent in June, down from 67.2 percent in May, and purchase closing rates dropped to 73.7 percent in June, down from 74.5 percent in May.

“Purchases are continuing their upswing, representing 65 percent of the total loans closed in June, the highest percentage since August of 2014. Refinances represented only 34 percent of closed loans last month,” said Jonathan Corr, president and CEO of Ellie Mae. “FHA purchases are also on the rise, representing 85 percent of closed FHA loans, the highest percentage since September of 2014.”

The Origination Insight Report mines its application data from a robust sampling of approximately 75 percent of all mortgage applications that were initiated on the Encompass® all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.

The Origination Insight Report is a supplement to Ellie Mae’s monthly Millennial Tracker, which focuses on millennial mortgage applications during specific time periods. Ellie Mae defines millennials as applicants born between the years 1980 and 1999. The Millennial Tracker will continue to be released on the first Wednesday of each month.

Other findings from the June report:

  • June days to close increased to 46 days, up from 45 days in May.
  • Debt-to-Income (DTI) ratio remained steady at 24/38 and Loan-to-Value (LTV) ratio held at 81.

MONTHLY ORIGINATION OVERVIEW FOR JUNE 2016

  June
2016*
May
2016*
6 Months Ago
(Dec. 2015)*
1 Year Ago
(Jun. 2015)*
Closed Loans
Purpose
Refinance 34% 37% 43% 38%
Purchase 65% 62% 56% 61%
Type
FHA 23% 23% 22% 24%
Conventional 64% 64% 65% 63%
VA 9% 9% 9% 10%
Days to Close
All 46 45 49 48
Refinance 47 44 47 52
Purchase 46 45 50 45
Percentage of ARM and Fixed Loan Volume
ARM % 4.8% 4.5% 5.3% 4.9%
30-Year Rate
Average 4.04% 4.06% 4.26% 4.12%

*All references to months should be read as month ended.

PROFILES OF CLOSED AND DENIED LOANS FOR JUNE 2016
  Closed First-Lien Loans (All Types)
FICO Score (FICO) 726
Loan-to-Value (LTV) 81
Debt-to-Income (DTI) 24/38

More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/.

To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior—or the March 2016 applications—to calculate an overall closing rate of 69.6 percent in June 2016 (see full report).

About the Ellie Mae Origination Insight Report

The Origination Insight Report focuses on loans that closed or were denied in a specific month and compares their characteristics to similar loans that closed or were denied three and six months earlier. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.

The Origination Insight Report details aggregated anonymized data pulled from Ellie Mae’s Encompass origination platform. The report does not disclose client-specific or proprietary information.

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call 877.355.4362 to learn more.

PRESS CONTACT

Erica Harvill
Ellie Mae, Inc.
(925) 227-5913
Erica.harvill@elliemae.com

Alexandra Gardell Kreuter
Allison+Partners
(646) 428-0618
EllieMae@allisonpr.com

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© 2016 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network, Mavent®, Millennial Tracker, Mortgage Returns®, Prospect Manager®, Total Quality Loan®, True CRM®, TQL® and the Ellie Mae logo are trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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