Get Ready, It’s Here

*Get Ready, It’s Here*
**By Tony Garritano**

TonyG***New data from Ellie Mae tells us what we already know, the purchase market is coming back. “The share of purchase loans continued to grow in September 2013, climbing 1% to 58% of all loans even in the face of higher interest rates and seasonality,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “This was the eighth consecutive month that the purchase loan percentage has increased or stayed steady. In January 2013, purchases represented only 27% of closed loans.”

****The Ellie Mae Origination Insight Report draws its data and insights from a robust sampling of the significant volume of loan applications—more than 20% of all originations in the United States.

****“The credit standards also continued to ease in September with average FICO scores for closed loans dropping to 732 compared to 734 in August,” noted Corr. “September’s averages were 15 points below where they were at the beginning of the year (January 2013) and the lowest level since we began our tracking in August 2011,” noted Corr. “When you drill down farther, the change is even more apparent. For example, 31% of the closed loans in September 2013 had FICO scores under 700 compared to 17.46% of closed loans in September 2012.”

****To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the June 2013 applications) to calculate an overall closing rate of 52.3% in September 2013, down from 53.1% in August 2013.

****“Similarly, debt-to-income ratios rose again slightly last month,” Corr concluded. “DTIs went from 24/37 in August to 25/37 in September 2013.”