PLEASANTON, Calif.,
Oct. 21, 2020 /PRNewswire/
-- Interest rates dropped to new historic lows in
September, hovering at 3.00 percent on all loans, representing the
lowest rate since Ellie Mae began tracking this data in 2011, and
down from 3.09 percent the month prior. This is according to the
latest Origination Insight Report from Ellie
Mae®, the leading cloud-based loan origination platform
provider for the mortgage industry and now ICE Mortgage
Technology, a division of Intercontinental Exchange, Inc. (NYSE:
ICE). The 30-year note rate for VA loans dropped to 2.78 percent,
down from 2.86 in August, putting it well below the 3.00 percent
mark. Similarly, the 30-year rate on FHA loans fell to 3.01
percent, down from 3.10 percent the month prior. Conventional rates
remained the highest overall at 3.02 percent, still down
considerably from 3.12 percent the month prior.
The rate decreases coincide with the revival in refinances as
they ticked back up to 58 percent in September, returning to their
pre-summer percentages. Purchase loans dipped back to 42 percent of
all closed loans in the month and while this is a significant drop
from 50 percent in January, it is well above the May low of 35
percent of all closed loans.
Other statistics of note in September included:
- The time to close all loans increased to 51 days in September,
up from 49 days in August. Time to close for purchase loans
increased to 47 days in September, up from 45 days in August. Time
to close for refinances increased to 54 days in September, up from
50 days in August.
- The FICO score average for all loans continued to increase to a
new 2020 high, rising to 753 in September, up one point from the
prior month.
- Closing rates decreased slightly to 77.1 in September, down
from 77.2 percent in August.
"We are continuing to see interest rates decrease to new
historic lows, hovering right at three percent for the month for
all loans," said Joe Tyrrell,
president, ICE Mortgage Technology. "As we move into fall and the
traditionally hot summer homebuying season normally tapers off, we
will watch to see if purchase loan applications trend downward and
refinances regain momentum. We know that homeowners are continuing
to take advantage of the low rates, almost an entire percentage
point lower than the same period in 2019, as a means to lower
monthly payments and stretch their dollar."
Tyrrell continued, "In addition, we're seeing FICO scores rise
to new 2020 highs, approximately 20 points higher than the same
period in 2019, indicating that lenders are being more selective,
but also that homebuyers and homeowners should understand the
various loan products available to find the one that suits their
profile best."
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.
Ellie Mae also offers Ellie Mae Insights™, the only analytics
solution in the market that provides peer benchmarking comparison
analysis in near real time. Ellie Mae Insights analyzes key metrics
such as efficiency levels, operational costs, rates and market
penetration, demographic data and pull through rates to help
lenders of all sizes to make informed decisions.
MONTHLY ORIGINATION OVERVIEW FOR SEPTEMBER 2020
|
September
2020*
|
August
2020*
|
6 Months
Ago
(March
2020*)
|
1 Year
Ago
(September
2019*)
|
Closed
Loans
|
Purpose
|
Refinance
|
58%
|
56%
|
55%
|
49%
|
Purchase
|
42%
|
44%
|
45%
|
51%
|
Type
|
FHA
|
10%
|
11%
|
13%
|
16%
|
Conventional
|
80%
|
79%
|
76%
|
71%
|
VA
|
6%
|
6%
|
7%
|
9%
|
Days to
Close
|
All
|
51
|
49
|
40
|
43
|
Refinance
|
54
|
50
|
35
|
39
|
Purchase
|
47
|
45
|
45
|
46
|
|
|
|
|
|
Percentage of ARM
and Fixed Loan Volume
|
ARM
%
|
2.5%
|
2.8%
|
3.2%
|
4.7%
|
30-Year
Rate
|
Average
|
3.00%
|
3.09%
|
3.65%
|
3.93%
|
*All references to
months should be read as month ended.
|
|
PROFILES OF CLOSED LOANS FOR SEPTEMBER
2020
|
Closed First-Lien
Loans
(All
Types)
|
FICO Score
(FICO)
|
753
|
Loan-to-Value
(LTV)
|
73
|
Debt-to-Income
(DTI)
|
23/34
|
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 2020 applications—to
calculate an overall closing rate of 77.1 percent in September 2020 (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,
de-identified 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, now a part of ICE Mortgage
Technology, a division of Intercontinental Exchange, Inc. (NYSE:
ICE), is the leading cloud-based loan origination platform provider
for the mortgage 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.
© 2020 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®,
Mavent®, Velocify®, Capsilon®, 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.
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SOURCE Ellie Mae