Refinancings as a percentage of overall mortgage volume jumped 3 percent from August to account for 36 percent of closed loans in September, according to the latest Origination Report put out by Ellie Mae. The September 2014 report also found the closing rate on mortgage refinancings fell nearly 6 percent to 48.3 percent in September, the lowest since February.
The Origination Insight Report mines its application data from a robust sampling of approximately 57 percent of all mortgage applications that were initiated on the Encompass origination platform. The Origination Insight Report is considered a strong proxy of the underwriting standards that are being employed by lenders across the country.
“It appears there may be life left in the refi market, as a number of consumers are still taking advantage of recovering equity in their homes and low interest rates to knock down their mortgage payments,” said Jonathan Corr, president and COO of Ellie Mae.
The percentage increase in refinancing activity was the first monthly increase in 2014, the report found. Among other findings in the report:
>> The average 30-year interest rate for all loans dropped for the fifth straight month to 4.381%, the lowest rate since July 2013
>> The average number of days to close a loan climbed above 40 days for the first time since June
>> The average number of days to close purchase loans rose 3 days from August to September
“While rates continue to fall, loans have been taking slightly longer to close since the peak of the summer buying season,” Corr said. “It will be interesting to see whether these trends continue as we head into the winter, a traditionally slower time for housing sales.”
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 firstname.lastname@example.org.