Home Purchase Market Gains Momentum While Time to Close Loans Dwindles According to Latest Origination Insight Report from Ellie Mae

PLEASANTON, Calif. – May 17, 2017 – Home loans for purchases continued to gain momentum in April, representing 65 percent of total loans, 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. Refinances represented 35 percent of total loans in the month.

The average time to close all loans dwindled to 42 days in April, down from 43 days in March and a substantial decline from 51 days in January. The time to close a refinance declined to 41 days in April, down from 43 days in March, and the time to close a purchase dropped to 42 days in April, down from 43 days the month prior.

The average 30-year note continued to rise in April to 4.41 percent, up from 4.39 percent in March, and the percentage of Adjustable Rate Mortgages (ARMs) increased to the highest point since November of 2014 to 5.9 percent, up from 5.6 percent the month prior.

“The purchase market continued its rise in April, representing 65 percent of total closed loans,” said Jonathan Corr, president and CEO of Ellie Mae. “We also saw the time to close loans shrink for the third consecutive month to 42 days, a substantial decrease from the 2017 high of 51 days in January. Ellie Mae customers are realizing efficiencies as they embrace technology to improve the homebuying experience.”

The Origination Insight Report mines its application 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.

Ellie Mae also distributes data from its monthly Ellie Mae Millennial Tracker, which focuses on mortgage applications submitted by millennials during specific time periods. Ellie Mae defines millennials as applicants born between the years 1980 and 1999. The Millennial Tracker will continue to be released on the first Wednesday of each month.

MONTHLY ORIGINATION OVERVIEW FOR APRIL 2017

  April
2017*
March
2017*
6 Months Ago
(Oct. 2016)*
1 Year Ago
(Apr. 2016)*
Closed Loans
Purpose
Refinance 35% 37% 47% 40%
Purchase 65% 63% 53% 59%
Type
FHA 23% 23% 20% 23%
Conventional 63% 63% 68% 64%
VA 10% 10% 9% 9%
Days to Close
All 42 43 48 44
Refinance 41 43 50 44
Purchase 42 43 46 45
Percentage of ARM and Fixed Loan Volume
ARM % 5.9% 5.6% 4.0% 4.5%
30-Year Rate
Average 4.41% 4.39% 3.76% 4.10%

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

PROFILES OF CLOSED AND DENIED LOANS FOR APRIL 2017
  Closed First-Lien Loans (All Types)
FICO Score (FICO) 722
Loan-to-Value (LTV) 80
Debt-to-Income (DTI) 25/39

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 January 2017 applications—to calculate an overall closing rate of 70 percent in March 2017 (see full report).

About the Ellie Mae Origination Insight Report

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 origination platform.

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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© 2017 Ellie Mae, Inc. Ellie Mae®, Encompass®, AllRegs®, the Ellie Mae logo and other trademarks or service marks of Ellie Mae, Inc. appearing herein are the property 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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