Time To Close Falls

Ellie Mae’s Origination Report uncovered some new trends. According to Jonathan Corr, president and chief operating officer of Ellie Mae, “The purchase market continued to climb in July with the share of closed purchase loans reaching 67 percent, the highest percentage since we began tracking this data in August 2011. Meanwhile, time to close for all loans dropped to 37 days, the lowest average we’ve seen since we began tracking. This reflects time to close decreasing across the board, with an average of 36 days for conventional loans and 38 days for FHA and VA loans.”

To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the April 2014 applications) to calculate an overall closing rate of 57.7 percent in July 2014, down from 60.7 percent in June 2014. Corr added, “The average 30-year rate for all loans declined once again to its lowest level of 2014: 4.388 percent in July, down from 4.421 percent in June 2014.

“The average FICO score fell one point to 727 in July, reversing a four-month trend. A further sign of easing: 32 percent of closed loans had an average FICO score under 700 last month compared to 25 percent in July 2013,” Corr concluded.

The Origination Insight Report mines its application data from a sampling of approximately 57 percent of all mortgage applications that were initiated on the Encompass origination platform. The 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 Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.

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