A new mortgage origination report developed by loan origination system vendor Ellie Mae provides insight into the books of business of the Pleasanton, Calif.-based software company’s lender clients.
The first edition of Ellie’s “Origination Insight Report” analyzes credit, loan type and pipeline turnover characteristics on the estimated 2 million mortgages that are originated annually with Ellie Mae’s technology, which the company said is more than 20% of the industry’s 2011 origination volume.
In its report, Ellie Mae reviewed the volume of loan applications initiated during the first 90 days of the year and that closed during the month of February. Of those loans, 48% closed, with a greater share of purchase loans (60%) closing compared to the rate of pending refinance mortgages that closed (42%). About two-thirds of the mortgages were for refinancings, up from a 64% share in loans that closed during the month of November.
“In February, it appears that lenders continued to be very cautious in terms of credit quality, down payments and valuations,” said Jonathan Corr, chief operating officer of Ellie Mae, in a press statement.
Loans that didn’t close were either still pending, withdrawn by the borrower or denied by the lender. The average time to close for all loans was 44 days, compared to 46 days for loans that closed in November and 40 days for loans that closed in August.
The average FICO score of closed loans was 750, compared to 699 for denied applications. The average loan-to-value of closed loans was 76%, while the average LTV for denied applications was 83%.
“Last month, if your FICO score was below 720 or you had a down payment or equity of less than 25%, there was a good chance that your refinance application for a conventional loan was denied or you were offered a significantly less attractive interest rate,” Corr said.
The average interest rate of 30-year fixed-rate mortgages that closed in February was 4.095%, compared to an average interest rate of 4.258% in November. Adjustable-rate mortgages accounted for only 4% of loans originated, down from 5.3% in November and 15-year fixed-rate mortgages remained about even at a 19% share of the origination volume in both February and November.
