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September Origination Insight Report from Ellie Mae Sees Percentage of Closed Purchase Loans Increase

October 17, 2018 at 9:00 AM EDT

PLEASANTON, Calif.--(BUSINESS WIRE)--Oct. 17, 2018-- The percentage of closed purchase loans increased in September to 71 percent of total loans according to the Origination Insight Report from Ellie Mae® (NYSE:ELLI), the leading cloud-based platform provider for the mortgage finance industry. Closed refinances represented 29 percent of total closed loans, returning to the July average.

In September, the average 30-year interest rate for all loans decreased for the first time in 2018 to 4.91 percent, down from the 2018 high of 4.92 percent in August. The percentage of Adjustable Rate Mortgages (ARMs) increased to 7.2 percent in September, up from 6.6 percent the month prior.

“We see refinances remain at a low percentage of aggregate closed loans and purchase inventory continues to be tight as we move into the fall,” said Jonathan Corr, president and CEO of Ellie Mae. “We did see the first reduction in interest rates this month and with that, the percentage of ARMs began to increase. However, we believe that the seasonal decline in home buying and continued affordability constraints will shape the purchase market.”

Other statistics of note in September included:

  • Closing rates for all loans held steady at 71.1 percent for the second month, the highest percentage in 2018. Closing rates on purchase loans increased to 76.4 percent, up from 75.9 percent the month prior. Closing rates on refinances increased to 64.4 percent in September, up from 63.5 percent in August.
  • The time to close all loans increased to 44 days in September, up from 43 days in August. Time to close a purchase loan held steady at 45 days, while time to close a refinance increased to 42 days in September, up from 38 the month prior.
  • Overall FICO scores increased by 3 points to 727 in September. LTV held at 79 for the second month while DTI decreased to 25/39.

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 SEPTEMBER 2018

 

      Sept. 2018*       Aug. 2018*       6 Months Ago

(March 2018*)

      1 Year Ago

(Sept. 2017*)

Closed Loans
Purpose
Refinance       29%       32%       38%       38%
Purchase       71%       68%       62%       62%
Type
FHA       20%       20%       20%       20%
Conventional       65%       66%       66%       66%
VA       10%       10%       10%       10%
Days to Close
All       44       43       41       43
Refinance       42       38       37       40
Purchase       45       45       43       44
Percentage of ARM and Fixed Loan Volume
ARM %       7.2%       6.6%       6.3%       5.5%
30-Year Rate
Average       4.910%       4.920%       4.690%       4.210%

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

PROFILES OF CLOSED LOANS FOR SEPTEMBER 2018

      Closed First-Lien Loans
(All Types)
FICO Score (FICO)     727
Loan-to-Value (LTV)     79
Debt-to-Income (DTI)     25/39

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 June 2018 applications—to calculate an overall closing rate of 71.7 percent in September 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.

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.Harvill@elliemae.com
or
Allison+Partners
Caitlin Coffee, 312-635-8204
EllieMae@allisonpr.com