2015 ended with the average time to close a loan holding steady at 49 total days according to the latest Origination Insight Report released by Ellie Mae, a provider of on-demand software solutions and services for the residential mortgage industry. While, the average time to close a refinance fell from 49 days to 47 days, purchases climbed 1 day to 50. The average time to close FHA and conventional loans remained largely unchanged at 49 days, while VA loans increased from 50 to 52 days.
In terms of loan purpose, purchases represented 56 percent of all closed loans while refinances as a percentage of lenders’ overall loan volume decreased for the first time in seven months from 46 percent in November to 43 percent in December.
Ellie Mae’s data also shows that the average FICO score on closed loans increased for the first time since May from 720 in November to 722 in December, while the average FHA refinance FICO score increased to 651, up from 648 in November.
Closing rates for all loans remained high at 67 percent in December, dropping slightly from 68 percent in November, with November’s results representing the highest percent in all of 2015. Closing rates on refinances reached their highest point of the year at 63 percent in December, while closing rates on purchases dropped slightly from 72 percent in November to 71 percent in December.
“While our customers are certainly impacted by the Know Before You Owe changes, we’ve been providing them with resources, training and tutorials to help mitigate the effects,” said Jonathan Corr, president and CEO of Ellie Mae. “And while the time to close loans remained consistent from November, the 49-day cycle is still a week longer than the time to close at this same time last year.”
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.
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.