The Percentage Of Purchase Loans Continues To Rise

The percentage of closed purchase loans increased to 62 percent of total closed loans, up 6 percent from the month prior according to the March Origination Insight Report from Ellie Mae. The percentage of closed refinances decreased to 38 percent, down from 43 percent the month prior.

This comes as 30-year interest rates continued to rise to 4.69 percent, up from 4.48 percent in February and 4.33 percent in January. This is the highest rate since January of 2014. Additionally, the percentage of Adjustable Rate Mortgages (ARMs) increased from 5.5 percent in February to 6.3 percent in March.

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Closing rates on purchase loans rose to 76.3 percent, up from 75.7 percent the month prior, while closing rates on refinances decreased slightly from 65.0 percent in February to 64.9 percent in March.

“With interest rates rising to the highest levels since January 2014, we’re seeing the purchase market continue to gain momentum,” said Jonathan Corr, president and CEO of Ellie Mae. “As we’ve seen in the past several months, the shift to a purchase market coupled with the adoption of digital mortgage solutions by our customers aids in driving down the time to close.”

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Other statistics of note in March included:

>>The percentage of refinances decreased across the board with FHA refinances dropping from 28 percent in February to 23 percent in March. Conventional refinances dropped from 48 percent in February to 43 percent in March, and VA refinances decreased from 33 percent in February to 28 percent in March.

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>>The time to close all loans decreased slightly from 42 days in February to 41 days in March. Time to close purchases dropped to 43 days in March, down from 45 days in February and 47 days in January.

>>Overall FICO scores increased slightly to 722. LTV increased slightly to 79 and DTI decreased to 26/39.

The Origination Insight Report mines data from a robust sampling of approximately 80 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.

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Partners Deliver Collaborative eClosing With eNotarization

Pavaso has partnered with Utah-based mortgage lender Intercap Lending, Salt Lake City-based Elevated Title and Columbus, Ohio-based Signature Closers to deliver an eClosing experience during which the lender, title company and notary provider all collaborate within the Pavaso portal to complete the closing.

On March 26, 2018, Intercap Lending used the Pavaso platform to electronically close its first loan with national title company Elevated Title and Signature Closers, a technology enabled notary and closing firm that partners with agencies nationwide. The partnership represents a true collaboration between lender, title company and closer using a single technology as its platform.

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40 years ago Intercap Lending started in the mortgage industry.  Their commitment to adapt and evolve to consumer demands allows them to continually add value to their customers. By shortening the process and collaborating with all parties to streamline the process, they deliver a better experience to their customers.

Pavaso’s built-in eNotarization capabilities allows borrowers to sign and notaries to verify and stamp documents digitally, executing the closing package more efficiently and securely. Pavaso’s Digital Close platform is scalable from hybrid closings (part ink, part digital) all the way to a full eNote and eVault capabilities. All parties to the transaction can execute a seamless eClosing process that provides transparency and education, supporting fairness to the borrower throughout the transaction.

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“Adapting to a rapidly evolving market has always been an important part of Intercap Lending’s ethos,” said Josh Romney, chairman and owner of Intercap Lending. “Our biggest asset is the trust and loyalty of our customers. Incorporating new technologies, such as eClosing, that help our customers have a better experience with our platform helps us continue to provide a level of service to our customers that surpasses that of our competitors.”

“So often the national lender doesn’t think about the client’s closing experience. They don’t realize that the last thing the borrower remembers is the closing process,” said Sally Farrar, Elevated Title’s CEO. “The lender can offer a streamlined, cutting-edge, online loan experience, but then, they turn their borrower over to a traditional title company that requires a borrower to go to an office or, sign with a notary, hundreds of documents. This can ruin the borrower’s entire loan experience.”

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“Today’s consumer demands transparency and efficiency to enable a smooth closing experience,” said Dan McGrew, COO, Pavaso. “IntercapLending, Elevated Title and Signature Closers have proven themselves leaders in the industry when it comes to using the best technology for the benefit of the consumer. In partnering with Pavaso, these companies have signaled the industry that the digital closing is no longer a “nice-to-have,” but rather, an essential ingredient in the consumer experience.”

“It’s extremely fulfilling to take part in the eClosing transformation in our industry working with partners like Elevated Title, Intercap Lending, and Pavaso,” said Mark Fleming, Jr., President Signature Closers, LLC. “The high level of communication and trust developed between our companies creates a simple, efficient process for signers across the country and allows us to continue to stay true to our mission of serving others in a responsive, first class way.”

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LenderLive Acquires Compliance, QA Company

LenderLive Services, LLC (LenderLive), a mortgage services provider, has acquired reQuire Holdings, LLC (reQuire), a group of technology-enabled companies that provide compliance, quality assurance and valuation solutions for the residential and commercial real estate market. LenderLive acquired reQuire from L2 Capital Partners, a Devon, PA-based private equity family office. The terms of the deal were not disclosed.

Headquartered in Virginia Beach, reQuire offers diverse services, including lien release tracking, title search and reporting services, title curative services, due diligence, quality assurance, asset valuation and business process management (BPM) technology solutions. reQuire’s current products will complement LenderLive’s document and settlement services offerings and enable the combined companies to provide additional compliant solutions to their clients.

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“When John Surface and I joined LenderLive nine months ago, we said one of our priorities would be to use strategic acquisitions to build out the services side of our business and enhance the capabilities of the broader organization,” said Rob Clements, chairman and chief executive officer of LenderLive. “We look forward to joining forces with Al Will and his team at reQuire as we execute on our long-term growth plans.”

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“The acquisition of reQuire strengthens our current franchise and solidifies LenderLive’s position as a leading provider of financial and compliance services,” added John Surface, president and chief operating officer of LenderLive. “The transaction deepens our management team and gives us a broad set of adjacent products that significantly expand our ability to serve our clients.”

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“We are very excited to join the LenderLive family. This combination significantly enhances our scale and capabilities that will enable us to deliver even greater value to our clients and new opportunities for our employees”, said Al Will, chief executive officer of reQuire.

Evercore acted as LenderLive’s financial advisor and Ballard Spahr LLP acted as legal counsel to LenderLive in connection with the acquisition.

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New “E” 1003 Solution Hits The Market

SimpleNexus has launched a new online loan application solution, adding to its suite of digital mortgage tools. The new e1003 application assists mortgage lenders with increasing customer engagement by making the process of applying for a mortgage easier.

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The e1003 integrates with the native app and entire SimpleNexus digital mortgage platform, creating an omni-channel experience that gives loan officers or realtor partners a simple way to immediately get the loan application into the hands of the borrower to fill out and complete.

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Borrowers can search for homes, apply for a mortgage, run calculations, upload documents and see real-time status of their loan progress. The loan application is responsive, ensuring easy navigation, regardless of the screen size or device. This significantly increases loan pull through while reducing abandonment rates.

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“Our custom e1003 improves the borrower experience by cultivating the human to human interaction with new technology that enhances rather than replaces the role of the loan officer,” stated Joe Wilson, SimpleNexus chief marketing officer.

Mortgage Lenders can configure the web application, choosing which questions to ask and in which order they appear. The online application is custom branded to the lending institution and includes individual pages for each loan officer to share.

SimpleNexus provides a private-label mortgage platform and mobile app that connects mortgage lenders with borrowers and real estate agents, allowing all parties to easily exchange data and documents through the lifecycle of a mortgage loan. With SimpleNexus, a loan officer becomes a mobile originator. Through its smartphone app, loan officers are able to view new loan applications instantly, pull and view credit reports, run live pricing scenarios via Optimal Blue, see a live CRM feed and send pre-approval letters—all of this from the palm of their hand, as the app connects real-time with their LOS.

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Firms Join Forces Providing Complete Investor Real Estate Services

PMI Puerto Rico property management company and Keller Williams Grand Homes brokerage have formed a strategic alliance to create a comprehensive real estate investment service for property owners. Each business will offer their specialized services to clients.

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“PMI will see continued growth in the property management sector because of its commitment to deliver an exceptional customer experience to property owners and building alliances with other professionals,” said Miguel Hernandez, owner of PMI Puerto Rico. Keller Williams Grand Homes will continue to provide brokerage and sales services to clients and will work together with PMI Puerto Rico who will provide full-service professional management of residential, commercial, association and vacation rental properties. PMI Puerto Rico and Keller Williams Grand Homes are also currently developing a rent-to-own program, anticipated to launch later this year. “Our alliance with PMI will allow us to continue to expand the services we can offer our clients in Puerto Rico,” said Orbe Soto, Operating Principal of Keller Williams Grand Homes.

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With the increased investor interest in Puerto Rico’s real estate market, there is a growing need for local professional property management services. Seasoned investors are very aware of the financial advantages of hiring a property manager to oversee the maintenance, tenant screening, and legal compliance with taxes and housing laws. Ultimately, professional property management provides a property owner with increased profit and protection of the property’s value. “The growing demand for property management services has created a great opportunity for two leading real estate companies to join forces to provide the best customer experience and the highest level of service available in Puerto Rico,” said Soto.

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Property Management Inc. is a property management and real estate services company providing leading-edge technology, training, systems, and support to more than 200 franchises. The PMI network manages more than $5 billion in assets globally and is a recognized leading property management franchise. Its innovative franchise program provides the only platform that unifies the four pillars of property management: residential, commercial, association, and vacation rental. PMI is named on the Inc. 5000, Entrepreneur’s Franchise 500 list as “Best in Category” winner for 2017 and 2018. Additionally, PMI is ranked as one of the Top 100 Global Franchises in 2017 by Franchise Direct.

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Data Security – What Every Mortgage Professional Needs To Know

Download Your Free PDF Copy of “Data Security – What Every Mortgage Professional Needs to Know” – Including Helpful Resources, Links, and Examples

By John Paasonen, CEO of Maxwell & Ken Kantzer, Co-Founder PKC Security

Mention data security to a mortgage executive and it’s enough to make them squirm. You can’t open a newspaper without reading about a security breach, even from some of the world’s most avantgarde technology companies.

Data is the heartbeat of the mortgage industry. Protecting it should be the priority for all organizations, no matter their size. And it’s time to size up to the reality that the conventional methods of security are no longer sufficient.

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Ken Kantzer knows a bit about data security. He is the co-founder of PKC Security, a cybersecurity consulting firm. He has undertaken cybersecurity consulting and code audit efforts across multiple sectors: high-tech startups, financial services, oil & gas, industrial infrastructure, and high-security government systems.

Reduce Fractured Business Architecture

The way most mortgage companies work is fractured and insecure. Data resides on systems from the loan officer’s messaging app on their smartphone through to the LOS and everywhere in between. Data sits in Word documents. It lives in Outlook. And it’s transferred to third parties as part of the process every day.

Despite marketing promises to the contrary, there is no single all-in-one platform today. Indeed that may be an unrealistic utopia. What is realistic is a set of best-of-breed, modern systems that work together seamlessly.

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“The best way to get hacked is to have systems on your hands that no one at your company understands,” says Ken. “Given the choice, opt for platforms that employ the most modern security measures, and simple interfaces between your systems.”

Protect Data Dynamically

The conventional castle-and-moat approach to data security is outdated. The financial services industry, particularly the mortgage vertical, must move beyond just firewalls, antivirus, content filtering, and threat detection. “The old idea of putting up a wall and standing watch just doesn’t hold true anymore,” says Ken. “The new approach to data protection focuses on resiliency — systems must ensure that even in worst-case scenarios where there is a data breach, the data can be rendered useless.”

Encryption is one such example of this approach. Mortgage companies can maintain control of their data, even when it is deployed in the cloud or in their data center. By moving security controls as close as possible to the data, a mortgage company can ensure that even after the perimeter is breached, the information remains secure. “At PKC, we always look at how cloud services use encryption, and how the encryption keys used by the service are protected. When encryption is properly implemented, it can be a huge help in strengthening the security of a service, but when it’s improperly implemented, it can actually hurt, by lulling users into a false sense of security.”

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If you haven’t been breached yet, you’re either lucky or you don’t even know it happened. Only mortgage companies that adopt a combination of password managers, encryption-at-rest (using tools like BitLocker or FileVault), and two-factor authentication can be confident that data is useless should it fall into unauthorized hands.

Make Sales & I.T. Collaborate

Hopefully you do the basics: security awareness training, security policies that are enforced across the organization, and a consistent process of monitoring and reviews. Although these are necessary, they often feel like shackles for the sales team.

As many CIO’s realize, employees are often the weakest link. “The key to security is not a sexy new kind of technology, it’s not machine or deep learning,” says Ken. “Of all the awesome technology to deploy to catch bad things before they happen, it’s your frontline employees that will have the highest rates of detection.”

When IT team and sales collaborate, it is the opportunity to confer the feeling that owning security is their responsibility. The key to security is getting every person to care about it, to set a shared value that we must “protect our house” both at home and in the office.

Rather than IT attempting to shackle sales, have them arm the sales team with market-leading mobile communication and collaboration tools that solve their problems, make them more productive and are, by their very nature, secure.

Finally, use the best technology has to offer to reduce non-selling administrative or customer service aspects of a loan officer’s role. Too often, those activities take up more time than the selling loans, and sadly are often created by poorly designed technology tools themselves. Ken agrees: “A mortgage company that understands how to minimize the amount of time a loan officer and her team spends doing administrative tasks, such as data entry and chasing borrowers for documents, will win by helping them be more productive.”

Hack Yourself

It sounds counterintuitive if not downright scary: invite hackers to analyze your systems, looking for security holes, and pay out a “bounty” when they find them. But PayPal, Western Union, Square, Simple and other financial services companies that have created or worked with so-called bug bounty programs say they’re an effective supplement for the work done by sometimes-strapped internal security folks.

Outside the industry, it’s become a common-enough practice that even the U.S. government launched a “Hack the Pentagon” program. Hackers have already found 100 vulnerabilities in Department of Defense systems and the program has paid out $15,000 to 1,400 participants.

Pay hackers to take your side and work with you, and avoid the legal, privacy, intellectual property and cyberfraud issues that result when they go it alone.

Companies that have been using bug bounty programs for years see only benefit to them. Along with the many other types of security defenses mortgage companies need, offering a bug bounty, or undergoing a quarterly penetration test, is likely to become a best practice in the industry.

Empower Your Customers

Two in three customers said they’d cease doing business with a company that experienced a breach where financial information was stolen. Half of the respondents to the global survey by Gemalto said they’d stop doing business with a company where personal information was stolen. A quarter of people said they’d consider legal action against the breached company.

In fact, a mortgage company can even increase customer trust by telling borrowers about the security measures that they have put in place to protect their data. By being open about the efforts they are making with regards to data protection, like encrypting data in transit and at rest, they can be perceived as trusted innovators.

Mortgage companies can take this a step further and, as well as informing customers about what they are doing to protect them, can also tell them what to do in order to protect themselves and become safer users of their services — for example, instructing them not to send sensitive documents by email.

Conclusion

Security must be at the forefront of all decisions made by mortgage professionals. Rather than letting this slow you down or cripple your organization, use security as your asset to grow your business. Have your teams empower each other rather than limit the capabilities of each group. Challenge yourselves regularly.

Technology and proper processes unlock efficiencies and can improve not only the security of your clients information, but your bottom line as well.

About Maxwell

Maxwell is a lightweight digital mortgage platform, helping lending teams become more efficient and provide the digital experience borrowers expect. Maxwell was created on the principle that mortgage companies will win by betting on the augmentation of human ability, not by replacing it with faceless technology. At Maxwell, the power of the human relationship is core to how we build software.

Founded in 2015, Maxwell is a member of the Mortgage Bankers Association and the Colorado Mortgage Lenders Association. In 2017, we were named one of the most innovative companies in real estate by HousingWire Magazine. Every day, our software is used by originators across the U.S. to serve thousands of homebuyers.

Download Your Free PDF Copy of “Data Security – What Every Mortgage Professional Needs to Know” – Including Helpful Resources, Links, and Examples

 

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BSI Financial Services Launches New Mobile App for Borrowers

BSI Financial Services, a mortgage-centric financial services company providing mortgage servicing and special servicing, has released a new mobile app that enables borrowers to manage their mortgage loans using tablet and mobile devices. The technology was designed and built in-house by BSI Financial software engineers.

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“Offering borrowers digital access to their loan information affords them greater choice and control in managing their loan obligations,” said Gagan Sharma, president and CEO of BSI Financial. “The functionality available in our mobile application satisfies a growing demand for convenience in financial management while providing us a foundation for future innovation,” he added.

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Using BSI Financial’s mobile app, borrowers can verify loan payments, view transaction history and identify future payment dates and amounts. They can also make one-time or ongoing loan payments using Automated Clearing House (ACH) functionality.

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Requests for loan verification and pay-off statements can be made using the app, with the option of fax or postal mail delivery.

Borrowers in default can monitor events and milestones in the loss mitigation process and communicate with their BSI Financial representative.

“These real-time capabilities enable us to resolve loans in loss mitigation faster than traditional phone-and-mail processes,” explained Sharma.

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Integration Furthers Digital Construction Lending

Built, a provider of secure, cloud-based construction lending software, is being integrated with Black Knight’s LoanSphere platform. Black Knight is a provider of integrated software, data and analytics solutions that facilitate and automate many of the business processes across the homeownership lifecycle. The Built integration will provide digital management on any construction loan using loan data from Black Knight’s two core LoanSphere systems: the LoanSphere Empower loan origination system and the LoanSphere MSP servicing system.

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Demand for construction loans has increased with owner-occupied products and renovation markets poised for continued growth. In the past, the administrative burdens of construction loans have been a significant barrier for many lenders because of the manual processes required for spreadsheets, phone calls, email threads and other loan-related communications. With the integration between Black Knight and Built, any construction loan can be digitally managed throughout the loan life cycle – from origination through servicing.

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“We are excited to add Black Knight to our Strategic Alliance Network. Both Empower and MSP are industry-leading enterprise solutions, and this integration will provide a complete, seamless experience from loan origination through construction,” said Built President and CEO Chase Gilbert. “As construction lending heats up across the country, the timing of this integration couldn’t be better for the industry.”

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LoanSphere is Black Knight’s end-to-end platform of integrated software, data and analytics supporting the entire mortgage and home equity loan lifecycle – from origination to servicing to default. The platform delivers business process automation, workflow, rules, and integrated data throughout the loan process, providing a better user experience, cost savings and support for changing regulatory requirements.

“Both lenders and servicers will benefit greatly from Built’s integration with LoanSphere, which connects lending functions and data to help clients reduce risk, improve efficiency, and drive financial performance,” said Black Knight President Joe Nackashi. “Built’s technology complements these capabilities by offering real-time data access to improve the overall experience between mortgage professionals, builders and their borrowers.”

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Docutech’s Harry Gardner Elected Chair Of ESRA Board Of Directors

Harry Gardner, executive vice president of eStrategies for Docutech, was named chair of the board of directors for the Electronic Signatures and Records Association (ESRA) for 2018. Gardner has participated in ESRA’s activities since its inception and joined the organization’s board of directors in January of last year.

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ESRA was founded in 2006 with the mission to lead and advocate the use of electronic records across multiple industries. The organization strives to develop and promote progressive eSignature-related public policy as well as inform and educate its members, lawmakers and the general public on changing regulations. ESRA currently comprises approximately 40 member-companies and organizations of electronic signature and document technology providers and users across the globe.

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“I’m honored to have been elected to serve as chair of the board of directors for 2018 and pleased to help ESRA as we move forward in this very critical year,” said Gardner. “Of course, improvement is always the main goal. We’re constantly looking to build up ESRA’s membership and to further expand our legislative and educational impact to see the full realization of the value proposition of eSignature technology across industries.”

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Gardner joined Docutech in 2016, building on more than 18 years of mortgage technology experience and standards development leadership. A leading player in the development of and education around mortgage technology standards, Gardner has written articles for many publications, including a series inMortgage Banking Magazine as the “eMortgage Evangelist.” At Docutech, Gardner collaborates with the leadership team to define and execute the electronic document and eSignature product strategy.

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Refinances Remain Ready Among Millennials

Refinances among Millennial borrowers regained their popularity in the fourth quarter of 2017, according to the latest Ellie Mae Millennial Tracker. December was the third straight month refinances accounted for 15 percent of all closed loans for Millennial borrowers – the highest percentage of refinances for this demographic since February 2017’s annual high of 17 percent. The percentage of closed purchase loans remained at 84 percent, decreasing from June 2017’s peak of 90 percent.

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Specifically, the percentage of Conventional refinances remained at 19 percent, holding steady since October, while FHA refinance loans stayed at six percent from the month prior. The percentage of Conventional purchase and FHA purchase loans also remained the same from November to December at 80 and 94 percent, respectively.

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“With seasonality and low inventory levels at the end of the year, Millennial borrowers continued to take advantage of refinance options during the fourth quarter,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “Many may have been driven by a desire to take advantage of low interest rates given uncertainty about potential rate hikes in the new year.”

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Other statistics of note for Millennial borrowers in December included:

>>The average 30-year note increased slightly from 4.18 in November to 4.22 in December, still lower than 2017’s highest monthly average of 4.34 in April.

>>The average time to close all loans held at 44 days in December.

>>Average time to close a refinance held at 45 days, while the time to close a purchase also remained flat at 42 days, the same since June 2017.

>>Average FICO scores for all closed loans fell one point from the month prior to 722.

The top Metropolitan Statistical Areas (MSAs) for Millennials by percentage of mortgage loans closed in December included Casper, Wyo. (71 percent), Williston, N.D. (63 percent), as well as Victoria, Texas and Mount Pleasant, Mich. (both 61 percent).

The Ellie Mae Millennial Tracker is an interactive online tool that provides access to up-to-date demographic data about this new generation of homebuyers. It mines data from a robust sampling of approximately 80 percent of all closed mortgages dating back to 2014 that were initiated on Ellie Mae’s Encompass mortgage management solution. Searches can be tailored by borrower geography, age, gender, marital status, FICO score and amortization type.

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