*The Return Of The Purchase Market*
**By Tony Garritano**
***Ellie Mae has released its Origination Insight Report for February 2013. The report draws its data and insights from a robust sampling of a significant volume of loan applications. The report shows that the purchase market is slowly inching up. Here’s the data:
****“Last month, the average FICO, LTV and DTI for closed loans all showed signs of easing,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “The average FICO dropped from 749 in January 2013 to 745 in February 2013, the lowest point since May 2012. Meanwhile, the average loan-to-value hit 80% for the first time since July 2012 and the backend debt-to-income ratio was 35% for the first time since June 2012––suggesting that the credit box may be expanding.
****“The purchase market is strengthening as the run-up begins for the spring buying season, rising from 27% of all closed loans in January 2013 to 32% in February 2013.” Corr continued, “Time to close improved considerably, dropping to 50 days in February 2013 from 54 days in January 2013.”
****To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the November 2012 applications) to calculate an overall closing rate of 56.8% in February 2013, up from 55.0% in January 2013.
****Corr added, “HARP 2.0 continues to show traction with conventional refinances at 95%-plus LTV rising for the sixth month in a row to 12.1% in February 2013, the highest level since we began tracking in October 2011.”
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at email@example.com.