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TD Bank Makes Moves To Go Digital

TD Bank has deployed their initial rollout of the Encompass digital mortgage solution, continuing Ellie Mae’s push upmarket into the largest lenders and banks in the United States. TD Bank is leveraging Encompass to streamline origination and call center vendor integrations onto one platform, speed up deployment of new online products, and significantly reduce the bank’s loan cycle time.

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TD Bank selected the Encompass platform because of their desire to improve the customer experience by leveraging an all-in-one system that will consolidate processes on a single, efficient, and easy-to-manage ecosystem. Encompass will enhance the bank’s ability to audit in-process loans, significantly reduce time to close, deploy new products faster and without gaps in services, and increase the bank’s overall nimbleness and flexibility. In addition, customers will now be able to access their disclosures online.

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TD Bank leveraged Ellie Mae’s Professional Services Organization for the implementation of Encompass. The implementation process required consensus from stakeholders across the organization reaching far beyond Encompass users, from technology groups in the United States and Canada, to downstream data systems to feed the bank’s diverse reporting needs. Ellie Mae’s proven implementation methodology with hundreds of Enterprise-class customers enables lenders to minimize costs, lower risks and accelerate team member adoption, leading to faster ROI. Ellie Mae’s Custom Solutions experience in delivering customized integrations built on top of the Encompass platform was leveraged by TD to collaboratively build out enhancements to further improve user efficiencies.

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“We are thrilled to announce that TD Bank has officially completed its initial rollout of Encompass,” said Jonathan Corr, president and CEO of Ellie Mae. “We’ve worked together to successfully transition TD from a legacy origination system to an agile solution equipped to handle the complexities and loan volume experienced by a leading national bank. We value the opportunity to partner with TD Bank to help them grow the mortgage lending arm of their business.”

“At TD, we place a strong and steadfast emphasis on continually enhancing both the customer and employee experiences,” said Rick Bechtel, EVP, Head of U.S. Mortgage Banking, TD Bank. “By leveraging Ellie Mae’s Encompass platform, we’re able to provide our customers with a simplified process, online access to documentation, and a substantial reduction in their loan closing time, all of which will dramatically enhance the mortgage lending experience. Simultaneously, Encompass will provide our employees with tools that increase efficiency and streamline processes – a huge win for the employee experience, as well. We could not be more excited to bring TD to the forefront of digital mortgage technology, and our Encompass deployment is the first step.”

Time To Close A Loan Decreased

According to data from Ellie Mae, time to close all loans decreased from 44 days in January to 42 days in February.

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Time to close all purchase loans decreased from 47 days in January to 45 in February and time to close all refinances dropped from 40 days in January to 37 days in February. This is a significant drop from 2017 data that shows time to close all refinances was 47 days. Time to close FHA loans also decreased from 47 days in January to 43 days in February and time to close a conventional loan shrank from 43 days in January to 41 days in February. Time to close VA loans shrank from 50 days in January to 47 days in February. This comes as 30-year interest rates continue to rise from 4.330 in January to 4.480 in February, the highest rate since May of 2014. The percentage of closed ARMs held at 5.5 percent for the second month.

Closing rates decreased slightly with closing rates on all loans decreasing from 70.9 percent to 70.6 percent and closing rates on refinances decreasing from 65.5 percent to 65.0 percent. Closing rates on purchases held at 75.7 percent for the second month.

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“As expected, we are seeing the percentage of refinances taper back off to the projected industry levels,” said Jonathan Corr, president and CEO of Ellie Mae. “And with interest rates on the rise, we’re seeing the purchase market begin to gain some momentum. We know that the shift to a purchase market will drive the shortened time to close and we will watch to see if the trend continues into the spring and summer months.”

Other statistics of note in February included:

>>The percentage of refinances dropped from 45 percent of all closed loans in January to 43 percent of all closed loans in February.

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>>The percentage of purchases increased to 57 percent of total closed loans.

>>The breakdown of type of loans remained the same for the second month with FHA loans representing 19 percent of closed loans, conventional loans representing 67 percent and VA loans representing 10 percent.

>>Overall FICO scores held steady at 721 for the second month. LTV increased from 77 to 78 and DTI held at 26/40.

The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans that closed 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 anonymized data pulled from Ellie Mae’s Encompass

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.

Cooperative Endorses LOS To Members

COCC, an award-winning client-owned financial technology company servicing financial institutions throughout the Northeastern United States, has entered into a partner agreement with Ellie Mae. Through this partnership COCC will offer the Encompass solution to members of the COCC cooperative.

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“Our mission is to be a trusted partner, delivering secure, quality solutions that drive the success of financial institutions,” said Matt L’Heureux, SVP & Chief Product Officer, COCC. “Through this partnership, COCC will provide Ellie Mae’s Encompass solution to our clients to help give them more control with functions and applications that improve efficiency, enhance quality and ensure compliance.”

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Launched in 1967, COCC was founded by its clients. This cooperative structure has set COCC apart from the competition and is one of the driving forces behind their success. COCC is the fastest growing financial data processing company in the United States and is recognized as a leader in delivering innovation and the quality service financial institutions demand and deserve.

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“We are delighted that COCC has chosen to partner with Ellie Mae to offer our Encompass loan origination solution to the banks and credit unions in its cooperative,” said Cathleen Schreiner Gates, Executive Vice President of Sales and Marketing at Ellie Mae. “By providing these financial institutions with Ellie Mae’s Encompass, they can leverage our technology to originate more loans, lower the cost to originate and reduce their time to close, all with the quality and compliance needed to meet the changing industry requirements.”

Higher Rates Did Not Deter Millennials

Summer temperatures and higher rates appeared to have little effect on the Millennial homebuying market, according to August data from the Ellie Mae Millennial Tracker. Conventional loans remained steady at 64 percent of all closed loans by this generation, while FHA mortgages stayed at 32 percent—a market share they have held since June. The average loan amount for loans closed by Millennial borrowers in August of 2017 was $185,919, a slight increase from August 2016’s average $184,113, despite the average 30-year note rate having increased to 4.211 percent from 3.706 percent last year.

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In August 2017, the average Millennial primary borrower was a 29.4-year-old who took out a Conventional loan of $185,919 to purchase a home with an average appraised value of $223,882. This average homebuyer had a FICO score of 724, which helped them get a 30-year note rate of 4.211 percent, and they closed on their home in 44 days. The majority (64 percent) of primary borrowers were male. Additionally, more than half (52 percent) of borrowers were married.

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On the West coast, the average Millennial borrower was slightly older, at 30.6 years old, taking out a loan of $314,579 on average. Average loan amounts were lower in the Midwest, with homebuyers of age 29.5 closing loans averaging $158,584 in Kansas, for example. In Hawaii, borrowers of 31.4 years took out loans averaging $396,766.

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Overall, Millennials were most likely to close loans for the purpose of purchasing a home (87 percent). Refinances accounted for 12 percent of loans closed by Millennials in August.

“Average loan amounts in August of this year were slightly higher than last year, despite higher interest rates,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “As tends to happen with tight inventories, this is a seller’s market, and many of today’s homebuyers may be faced with paying a premium for the same home they might have bought for less last year. For those who are committed to buying a home, though, slight increases in competition, costs or interest rates will likely not deter them.”

Other key findings from the August 2017 Ellie Mae Millennial Tracker include:

The top five markets where Millennial borrowers represented the highest percentage of homebuyers in August were Lima, Ohio, Batavia, N.Y., Dyersburg, Tenn., Roswell, N.M., and Kendallville, Ind.

Female homebuyers increased their purchase power, with closed loans in August averaging $189,574, up significantly year-over-year from $184,094. Males took a slightly smaller jump, averaging $196,246 in August 2017, versus $194,913 last year.

The metropolitan region with the largest percentage of female homebuyers (63 percent) was Mankato, Minn., with an average loan amount of $136,597 and average borrower FICO score of 723.

Males made up 60 percent of the Millennial market in Lima, Ohio, with loans averaging $86,845 and averaging borrower FICO scores coming in at 725.

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 all-in-one mortgage management solution.

About The Author

Tony Garritano

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 tony@progressinlending.com.

Refinances Remain Steady With Slight Uptick In Interest Rates

The percentage of refinances remained steady at 35 percent of total loans, despite a slight uptick in interest rates according to the August Origination Insight Report from Ellie Mae. Additionally, overall closing rates climbed to 71.7 percent, the highest since January of 2017 and up from 70.6 percent in July.

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“As the summer season drew to a close, refinances held steady at 35 percent of all closed loans coupled with a slight increase in interest rates to 4.27, up from the 2017 low of 4.25 in July,” said Jonathan Corr, president and CEO of Ellie Mae.

Other statistics of note in August included:

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>>The percentage breakdown of all closed loans remained steady for the third consecutive month with conventional loans representing 64 percent of all closed loans, FHA loans representing 22 percent of all closed loans, and VA loans representing 10 percent of all closed loans.

>>While the average FICO score on all closed loans remained steady at 724 in August, average FICO scores for FHA refinances increased three points to 649. The average FICO score for conventional purchase loans decreased to 752 in August and FICO scores for VA refinances increased two points to 702, up from 700 in July.

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>>Closing time for all loans fell to 42 days in August. Time to close a refinance decreased to 41 days, down from 42 days the month prior. Time to close a purchase loan remained at 43 days in August.

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.

In addition to the Origination Insight Report, Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker on the first Wednesday of each month. The Ellie Mae Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.

About The Author

Tony Garritano

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 tony@progressinlending.com.

Integration Speeds Up The Process

QuickInsured, an independent insurance agency specializing in the mortgage industry, announced that its homeowners insurance quote service is now available through Ellie Mae’s Encompass. The seamless integration allows lenders to order QuickInsured’s solutions directly through Encompass to drive quality and efficiency in the loan origination process.

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Obtaining home insurance quotes and selecting a carrier is often a time-consuming process for consumers, and can complicate and delay mortgage closings. QuickInsured offers an automated solution that enables borrowers to receive an instant home insurance quote while finalizing the terms of their loan. With the integration, Encompass users are now able to expedite this process for their borrowers so quotes are delivered in seconds. The technology is device agnostic, so on-the-go borrowers can easily generate and bind their quote from a handheld device.

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Ellie Mae is a provider of on-demand software solutions and services for the residential mortgage industry. Ellie Mae’s Encompass all-in-one mortgage management solution provides one system of record that enables banks, credit unions and mortgage lenders to originate and fund mortgages and improve compliance, loan quality and efficiency.

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“QuickInsured is delighted to partner with Ellie Mae,” said QuickInsured CEO, Jerry Batt. “Our secure, seamless integration with Encompass enables our clients to simplify the process of ordering and securing homeowners insurance for borrowers, so they can more efficiently process mortgage loans and grow their business. We look forward to a long, successful relationship with Ellie Mae.”

Batt added, “It’s imperative that mortgage companies to find ways to reduce closing times with loan origination costs on the rise. The time it takes for a borrower to manually receive homeowners insurance quotes and decide on a policy can delay closings, causing headaches for both the borrower and the originator. QuickInsured developed a product to relieve the stress this can cause by enabling borrowers to receive a competitive, bindable quote from an A-rated carrier in a matter of seconds. Also, the technology is device agnostic, so on-the-go borrowers can easily generate and bind their quote from a handheld device.”

Ellie Mae Launches Updates To Encompass

Ellie Mae has updated its Encompass LOS. Encompass 17.2 enhancements are designed to help lenders of all sizes close more loans, shorten time to close and ensure compliance with regulatory standards. Specifically, the new major release of Encompass includes support for 2018 HMDA collection and reporting changes that expand data capture related to applicants, property and loan features. Additionally, the new major release of Encompass offers secondary marketing enhancements and updates to Encompass Product and Pricing Service.

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“With this major release of Encompass, we’re providing the innovative capabilities that enable our banks, credit unions and mortgage lenders to originate and fund mortgages with complete compliance, loan quality and efficiency,” said Jonathan Corr, president and CEO of Ellie Mae. “While data collection under the new Home Mortgage Disclosure Act (HMDA) begins in January of 2018, this release gives clients support in advance for the new fields to provide greater time to educate, train and prepare.”

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Encompass 17.2 enhancements include:

Support for 2018 HMDA Collection and Reporting Changes

Encompass 17.2 enables collection of the new data set required for loans with a final disposition in 2018 and beyond in a single system of record. A HMDA LAR (Loan Application Register) compliant with the new guidelines published in the CFPB rule is featured in the solution, as well as substantial automation to reduce lender processing time and risk in creating their reports. Also included is the optional expanded Demographic Information Addendum.

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Ellie Mae has a substantial number of tools and resources available to help clients prepare and train internal teams on the new HMDA Reporting Changes.

Secondary Marketing Enhancements

Criteria Based Auto-Lock: Encompass 17.2 includes new functionality to enable more lock desk controls to mitigate risk and reduce exposure. The new criteria based auto-lock allows for control of which lock scenarios should not be allowed to be auto-locked.

Bulk Pricing for Trade Management: To further enhance support for capital markets, Encompass 17.2 includes enhancements for individual loan pricing on bulk trades for correspondent buyers and sellers. It also supports a weighted average bulk price that can be applied to all loans in the bulk.

Encompass Product and Pricing Service Enhancements

Encompass 17.2 introduces support for additional investor pricing, support for Planned Unit Development (PUDs), the ability to identify geography locations using geocoding, and support for VA maximum guarantee to reflect the GSE conforming limits.

Time To Close Shrinks

In February, time to close all loans for Millennial borrowers decreased to 44 days, the shortest average time to close since March 2016, according to the latest Millennial Tracker released by Ellie Mae. The average time to close a purchase loan for Millennials decreased from 46 days in January to 42 days in February, while time to close a refinance loan also decreased to 52 days in February, down from 58 days the month prior. Similarly, the average time to close FHA loans decreased from 47 days in January to 43 days in February. Average time to close VA loans decreased dramatically from 57 days to 41 days.

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As U.S. housing trends toward a buyer’s market, purchases accounted for 86 percent of all closed loans for the month of February, a slight uptick from 84 percent in January, while refinances fell two percentage points to 14 percent of all loans to Millennial borrowers. Share of conventional loans stayed steady from the month prior, representing 61 percent of loans, while FHA loans increased to 36 percent in February, up from 35 percent the month prior.

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FICO scores across all loan types continued to fall in February to an average of 723, down from 724 in January and their peak of 726 from August through October 2016. For purchases, the average FICO score was 747 for a conventional loan, 690 for an FHA loan and 745 for a VA loan.

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“Purchase loans are increasing, indicating that Millennials are continuing to enter the first-time homebuyer market,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “In addition, we saw time to close decrease from 49 days in January to 44 days in February, which indicates that our lenders are seeing more efficiency as they embrace mortgage automation.”

In February, the hottest housing market for Millennials was in the state of Texas. The top markets by percentage of Millennial loans closed in the state included Odessa, Midland and Beaumont-Port Arthur.

About The Author

Tony Garritano

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 tony@progressinlending.com.

Borrowers Want High Tech And High Touch

Fifty-seven percent of homeowners applied for and completed their latest mortgage completely in person, while more than one-quarter of homeowners (28 percent) applied for their most recent mortgage using a combination of online and in-person interaction, according to the 2017 Borrower Insights Survey of homeowners and renters conducted by mortgage automation provider Ellie Mae. Another 11 percent of homeowners applied for their latest mortgage completely online with no in-person interaction.

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When asked what factor would have improved the mortgage process, approximately 40 percent of homeowners indicated they would have liked a faster process with fewer delays. Twenty percent indicated that a shorter, easier to understand application would be preferable, while 11 percent asked for more communication with their lender throughout the process.

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Millennials were the most likely generation of homebuyers to begin their mortgage application online and finish it with an in-person interaction with their lender (30 percent). Gen X (28 percent) and Baby Boomer (20 percent) borrowers weren’t far behind in using this online and in-person approach.

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“There’s no question that technology is playing a larger role in the home buying experience,” said Joe Tyrrell, executive vice president of corporate strategy at Ellie Mae. “As we expected, many homeowners are seeking a faster and more streamlined experience. And it’s not just a millennial phenomenon; it’s homebuyers of all ages and both genders.”

“But what’s even more telling is that homeowners still want a personal interaction with their lender. They want someone who can answer important questions, and make them feel confident that everything will be handled correctly and on time. While 27 percent of millennials identified the speed of the process as the top area to improve their experience, surprisingly 23 percent cited more face-to-face interaction as the second-greatest opportunity for improvement. By leveraging technology, lenders can provide a more high tech experience to simplify and speed the overall process, while still having the high-touch interactions when and where homebuyers want,” Tyrrell said.

The Ellie Mae survey found that today’s homebuyers most value speed, security and simplicity when applying for a home loan – all of which are enabled by technology. Millennials and women were the most likely to cite security as the most important factor when they applied for a loan. Gen X and Baby Boomer buyers were more likely to value the speed of the process. All three generations equally valued simplicity.

About The Author

Tony Garritano

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 tony@progressinlending.com.