This month the Ellie Mae Origination Insight Report shed some light on the state of closings. “The closing rate in August was the highest since we began tracking this data three years ago: 61.1 percent for all loans and 65.1 percent for purchase loans,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “This was further indication that lenders are working every deal and making sure leads don’t slip away.
In 2013, approximately 3.5 million loan applications ran through Ellie Mae’s Encompass mortgage management solution. 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. Given the size of this sample and Ellie Mae’s market share, the Company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.
“The time to close rose slightly last month, going up to 39 days from 37 in July, and the percentage of purchase loans remained in the high sixties,” said Corr. “Further, the average 30-year rate declined for the fourth consecutive month, to 4.386 percent for all loans, which was materially lower than where we were a year ago when the average rate was 4.618 percent for all loans.”
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 Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.
The Origination Insight Report details aggregated, anonymized data and does not disclose client-specific or proprietary information.
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