Lenders Loosen up as Refis Tank | Mt Kisco Real Estate

In July, lenders loosened up their underwriting standards more than they have in yeas as purchase mortgages overtook refinancing as the leading source of mortgage originations according to Ellie Mae’s July Originations report.

“In July, the mix of purchase loans to refinances was 53% versus 47%: the largest percentage of purchase loans since we began tracking the data in August 2011,” said Jonathan Corr, president and chief operating officer of Ellie Mae. “This was a further indication that housing seems to be improving. Just six months ago, 73 percent of all mortgages were refinancings.

“Credit standards continued to ease in July,” said Corr. “The average FICO score fell to 737, from 742 in June 2013, and it is now at the lowest level since we began our tracking in August 2011. Similarly we saw slight increases in both loan-to-value and debt-to-income ratios last month-signs that lenders are willing to accept slightly more risk to maintain volume. Dent to income ratios also have risen to the highest level since Elli Mae began tracking mortgage data in February 012.

To get a meaningful view of lender “pull-through,” Ellie Mae reviewed a sampling of loan applications initiated 90 days prior (i.e., the April 2013 applications) to calculate an overall closing rate of 55.4% in July 2013, up from 54.3% in June 2013.

MONTHLY ORIGINATION OVERVIEW FOR JULY 2013

July 2013*

June 2013*

6 Months Ago
(January 2013)*

1 Year Ago
(July 2012)*

Closed Loans

Purpose

Refinance

47%

51%

73%

58%

Purchase

53%

49%

27%

42%

Type

FHA

19%

19%

18%

24%

Conventional

71%

71%

74%

67%

Days to Close

All

47

47

54

48

Refinance

48

47

55

48

Purchase

46

46

51

47

ARMs vs. Fixed, Length, Rate

ARM %

5.2%

4.0%

2.1%

3.1%

15 Year %

15.5%

16.5%

16.9%

15.3%

30 Year – Note Rate

4.357

3.918

3.634

3.870

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

PROFILES OF CLOSED AND DENIED LOANS FOR JULY 2013

Closed First-Lien Loans

Denied Loans

(All Types)

(All Types)

FICO Score (FICO)

737

702

Loan-to-Value (LTV)

81

84

Debt-to-Income (DTI)

24/36

28/44

 

 

 

 

Lenders Loosen up as Refis Tank | RealEstateEconomyWatch.com.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.