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June Origination Insight Report from Ellie Mae Sees Purchase Percentage Continue to Rise While Closing Rates on Purchases Remain Strong

July 18, 2018 at 9:00 AM EDT

PLEASANTON, Calif.--(BUSINESS WIRE)--Jul. 18, 2018-- The percentage of closed purchase loans continued to increase to a new high of 71 percent, up one point from May, according to the most recent Origination Insight Report from Ellie Mae® (NYSE:ELLI), the leading cloud-based platform provider for the mortgage finance industry. This is the new highest percentage of purchase loans recorded since Ellie Mae began tracking data in 2011.

In June, the 30-year interest rate rose yet again to 4.9 percent, up from 4.84 in May, and a new Origination Insight Report all-time high. The percentage of Adjustable Rate Mortgages (ARMs) rose to 6.9 percent, up from 6.6 percent the month prior.

“While inventories remain tight and interest rates are on the rise, we are still seeing a very robust purchase market with 71 percent of all loans representing home purchases and closing rates at 75 percent on purchase loans,” said Jonathan Corr, president and CEO of Ellie Mae. “We hope to see the time to close decrease in the coming months as more lenders take advantage of digital mortgage solutions like Encompass Consumer Connect™ that are designed to turn homebuyer interest into applications and drive a more efficient loan origination process.”

Other statistics of note in June included:

  • The percentage of refinances decreased across the board with FHA refinances sinking to 19 percent, conventional refinances down to 31 percent and VA refinances at 23 percent.
  • The time to close all loans rose one day to 42 days in June. Time to close refinances held at 37 days, and time to close purchases increased to 44 days, up from 43 the month prior.
  • Overall FICO scores increased slightly for the fourth consecutive month to 726, up two points from May. LTV rose to 80 and DTI remained at 26/39.

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 JUNE 2018

      Jun. 2018*     May 2018*     6 Months Ago

(Dec. 2017*)

    1 Year Ago

(Jun. 2017*)

Closed Loans
Purpose
Refinance     29%     30%     40%     32%
Purchase     71%     70%     60%     68%
Type
FHA     20%     20%     20%     22%
Conventional     66%     66%     66%     64%
VA     10%     10%     10%     10%
Days to Close
All     42     41     44     43
Refinance     37     37     41     41
Purchase     44     43     46     43
Percentage of ARM and Fixed Loan Volume
ARM %     6.9%     6.6%     5.6%     5.9%
30-Year Rate
Average     4.900%     4.840%     4.280%     4.270%
               
*All references to months should be read as month ended.
 

PROFILES OF CLOSED LOANS FOR JUNE 2018

     

Closed First-Lien Loans

(All Types)

FICO Score (FICO)     726
Loan-to-Value (LTV)     80
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 March 2018 applications—to calculate an overall closing rate of 70.2 percent in May 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 nonqualification.

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

Ellie Mae, Inc.
Erica Harvill, 925-227-5913
Erica.Harvill@elliemae.com
or
Allison+Partners
Alexandra Gardell Kreuter, 646-428-0618
EllieMae@allisonpr.com