To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the January 2014 applications) to calculate an overall closing rate of 55% in April 2014, down from 58% in March 2014. “Purchase share for all loans increased for the third straight month, jumping another three percentage points to represent 63 percent of all closed loans,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “This is the highest percentage of purchase loans we’ve seen since we began reporting data in August 2011 and two percentage points higher than the previous high of 61 percent in October 2013.
The Ellie Mae Origination Insight Report focuses on loans that closed or were denied in a specific month and compares their characteristics to similar loans that closed or were denied three and six months earlier. 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 Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.
“Also, average days to close loans dipped below 40 for the first time since we’ve been reporting data, falling to 39 days in April 2014. That’s the third straight month that days to close a loan declined. The average days to close a purchase loan has fallen seven days since January 2014,” added Corr. “Looking at rates, the average 30-year rate on a closed loan increased for the first time since January, rising to 4.622 percent in April 2014.”
About The Author
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.