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November Origination Insight Report from Ellie Mae Sees Percentage of Adjustable Rate Mortgages Reach Highest Point in History of Report

December 19, 2018 at 9:00 AM EST

PLEASANTON, Calif.--(BUSINESS WIRE)--Dec. 19, 2018-- According to the November Origination Insight Report from Ellie Mae® (NYSE:ELLI), the leading cloud-based platform provider for the mortgage finance industry, the percentage of Adjustable Rate Mortgages (ARMs) reached 8.9 percent, the highest percentage since Ellie Mae began tracking data in 2011.

The increase in ARMs is directly correlated to the 30-year rate, which rose to 5.15 in November, up from 5.01 the month prior. For FHAs, the 30-year rate increased from 5.05 in October to 5.19 in November. Conventional rates increased from 5.03 in October to 5.17 in November, and VA rates rose from 4.83 to 4.99.

“As interest rates continue to rise, we are seeing the percentage of Adjustable Rate Mortgages rise in lockstep, and this month they’ve risen to the highest percentage we’ve seen since we began tracking data,” said Jonathan Corr, president and CEO of Ellie Mae. “As expected, we are also continuing to see the percentage of refinances remain low—30 percent in November—due to higher interest rates.”

Other statistics of note in November included:

  • The time to close all loans increased to 46 days in November, up from 45 days in October. Time to close a purchase loan increased to 48 days, up from 46 days in October, while time to close a refinance remained at 43 days for the second consecutive month.
  • The percentage of purchase loans rose to 70 percent of total loans in November, up from 68 percent the month prior.
  • Overall FICO scores remained steady at 727 in November for the third month. LTV held at 79 for the fourth month, and DTI held at 26/39 for the second month.

The Origination Insight Report mines data from a robust sampling of approximately 80 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.

In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.

 

MONTHLY ORIGINATION OVERVIEW FOR NOVEMBER 2018

    Nov. 2018*   Oct. 2018*  

6 Months
Ago
(May 2018*)

 

1 Year Ago
(Nov. 2017*)

Closed Loans
Purpose
Refinance   30%   32%   30%   39%
Purchase   70%   68%   70%   61%
Type
FHA   19%   19%   20%   20%
Conventional   65%   65%   66%   66%
VA   10%   10%   10%   10%
Days to Close
All   46   45   41   43
Refinance   43   43   37   40
Purchase   48   46   43   45
Percentage of ARM and Fixed Loan Volume
ARM %   8.9%   8.2%   6.6%   5.6%
30-Year Rate
Average   5.150%   5.010%   4.840%   4.240%

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

 

 

PROFILES OF CLOSED LOANS FOR NOVEMBER 2018

    Closed First-Lien Loans
(All Types)
FICO Score (FICO)   727
Loan-to-Value (LTV)   79
Debt-to-Income (DTI)   26/39
 

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 August 2018 applications—to calculate an overall closing rate of 72.2 percent in November 2018 (see full report).

About the Ellie Mae Origination Insight Report

The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans. 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.

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 the leading cloud-based platform provider for the mortgage finance industry. Ellie Mae’s technology solutions enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring the highest levels of compliance, quality, and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.

© 2018 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, Mavent®, Velocify®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

Source: Ellie Mae, Inc.

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

Caitlin Coffee
Allison+Partners
(312) 635-8204
EllieMae@allisonpr.com