To close out the year, purchase loans represented more than half of closed loans – which was double the share from the beginning of 2013, according to Ellie Mae's Origination Insight Report for December.
About 54.3% of all loans that were initiated 90 days prior to Oct. 1 closed in December – up from 53.1% in November. It took an average of about 46 days to close a purchase loan deal, and 40 for a refinance. For comparison, in December 2012, it took an average of 51 days to close a purchase loan, while it took 57 for a refinance.
Purchase loans represented 54% of closed loans in December, while refinancings represented 46%, "helped in part by the average 30-year note rate staying below 4.6%," notes Jonathan Corr, president and chief operating officer of Ellie Mae. In November, purchase loans represented 55% of closed loans, while refinancings represented 45%.
"Home Affordable Refinance Program-related refinancing activity increased for the second month in a row, as conventional refinances at 95%-plus loan-to-value (LTV) rose to 12.1% in December – the highest they've been since August 2013," Corr continues.
"2013 closed with the loosest credit requirements of the year. The average FICO score for all closed loans last month was 727 – 11 points below the 2013 average of 738, and 21 points lower than December 2012, when the average was 748. Last month, 31% of closed loans had FICO scores below 700, compared to 21% in December 2012.
"In addition, both back-end debt-to-income (39%) and average LTV (82%) for December were at their highest points for 2013," he concludes.
In 2013, approximately 3.5 million loan applications ran through Ellie Mae's Encompass mortgage management solution. The Origination Insight Report mines its application data from a sampling of approximately 57% of all mortgage applications that were initiated on Encompass.
The full report can be found here.