Press Release

Average Time to Close a Loan Remained Steady at 49 Days According to Latest Origination Insight Report

Purchase share ends 2015 on an upswing, representing 56% of all closed loans

PLEASANTON, Calif. – January 20, 2016 – 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® (NYSE:ELLI), a leading provider of innovative 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.

Other findings from the December report:

  • The average 30-year rate for all loans increased slightly to 4.26.
  • The conventional purchase closing rates climbed above 72 percent for the first time since we began tracking data in August 2011.
MONTHLY ORIGINATION OVERVIEW FOR DECEMBER 2015
  December
2015*
November
2015*
6 Months Ago
(June. 2015)*
1 Year Ago
(Dec. 2014)*
Closed Loans
Purpose
Refinance 43% 46% 38% 43%
Purchase 56% 53% 61% 56%
Type
FHA 22% 23% 24% 17%
Conventional 65% 64% 63% 67%
VA 9% 10% 10% 11%
Days to Close
All 49 49 48 42
Refinance 47 49 52 42
Purchase 50 49 45 42
Percentage of ARM & Fixed Loans
ARM % 5.2% 5.3% 4.9% 5.8%
15 Year % 10.8% 10.7% 9.7% 9.9%
30-Year Rate
Average 4.260% 4.226% 4.118% 4.251%

*All references to months should be read as month ended.

PROFILES OF CLOSED AND DENIED LOANS FOR DECEMBER 2015
  Closed First-Lien Loans (All Types) Denied Loans
(All Types)
FICO Score (FICO) 722 654
Loan-to-Value (LTV) 80 86
Debt-to-Income (DTI) 25/39 28/48

More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at http://www.elliemae.com/about-us/news-reports/ellie-mae-reports/.

To get a meaningful view of lender pull-through, Ellie Mae reviewed a sampling of loan applications initiated 90 days prior—or the September 2015 applications—to calculate an overall closing rate of 67.3 percent in December 2015 (see full report).

About the Ellie Mae Origination Insight Report

The Origination Insight Report mines its application data from a robust sampling of approximately 66 percent of all mortgage applications that are initiated through Ellie Mae’s Encompass all-in-one mortgage management solution. In 2014, approximately 3.7 million loan applications ran through Encompass. Given the size of this sample and Ellie Mae’s market share, the Company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.

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 anonymized data. The report does not disclose client-specific or proprietary information.

News organizations have the right to reuse this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Mortgage lenders of all sizes use Ellie Mae’s Encompass® all-in-one mortgage management solution, Mavent Compliance Service, and AllRegs research, reference and education resources to improve compliance, loan quality and efficiency across the entire mortgage lifecycle. Visit EllieMae.com or call 877.355.4362 to learn more.

PRESS CONTACT

Erica Harvill
Ellie Mae, Inc.
(925) 227-5913
Erica.harvill@elliemae.com

Alexandra Gardell Kreuter
Allison+Partners
(646) 428-0618
EllieMae@allisonpr.com

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© 2016 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, DataTrac®, Ellie Mae Network™, Mavent®, Mortgage Returns®, Prospect Manager, Total Quality Loan™, True CRM®, TQL™ and the Ellie Mae logo are trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.

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