Purchase loans as a percentage of lenders’ overall mortgage volume rose for the third straight month in May with a 6 percent jump to 58 percent, according to the latest Origination Insight Report released by Ellie Mae. According to the latest report, the average 30-year rate on all closed loans fell slightly for the first time since February, from 4.062% to 4.013%.
“Our May data reflects a home buying season in full swing,” said Jonathan Corr, president and CEO of Ellie Mae. “While the share of purchase loan volume is lower than it was one year ago, lower mortgage rates has given some help to refinancing volumes and share.”
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 all-in-one mortgage management solution. Ellie Mae believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
Other findings of the May report include:
>> The overall closing rate for purchase loans climbed to 68.2 percent, the highest since January and almost 5% higher than the 2014 average.
>> The average closing period for all loans rose from 45 to 46 days.
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 Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.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 data. The report does not disclose client-specific or proprietary information.
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.