Mortgage refinancing as a share of overall loan volume jumped 8 percent in February to comprise 59 percent of lenders’ loan volume, according to the latest Origination Report released by Ellie Mae. Meanwhile, the average time to close a refi loan fell to 36 days, the lowest level since Ellie Mae began tracking this data in August 2011.
The average interest rate for a 30-year fixed rate mortgage fell from 4.154% to 4.008%, the lowest level in two years, according to Ellie Mae’s data. The average interest rate for 30-year fixed FHA loans fell below 4% for the first time since June 2013.
“The drop in the average 30-year fixed rate in last few months has kept lenders busy with increased refinance business,” said Jonathan Corr, president and CEO of Ellie Mae. “Considering the demand, the fact that lenders are taking fewer days to close the average refi loan is very good news.”
The Origination Insight Report mines its application data from a robust sampling of approximately 66 percent of all mortgage applications that were initiated on the Encompass origination platform. In 2014, approximately 3.7 million loan applications ran through Ellie Mae’s Encompass mortgage management solution. The Origination Insight Report mines its application data from a robust sampling of approximately 66 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 Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.
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.