Purchase loan activity climbed 3 points to account for 61 percent of lenders’ overall mortgage volume, 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. This marks the first time that purchase loans have reached 60 percent since October 2014. Meanwhile, lenders’ closing rate on all purchase loans rose to 69 percent, the highest level since Ellie Mae began tracking this data in August 2011.

According to the latest report, the average 30-year rate on a closed loan rose from 4.013% to 4.118%. The data also showed that the average FICO score on a closed loan in June fell three points to 727, the lowest of the year.

“With a surging housing market and U.S. home sales at their highest level in years, lenders remained busy in June,” said Jonathan Corr, president and CEO of Ellie Mae. “The improving closing rate is a continued sign that borrowers are being approved and following through with purchases.”

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.

MONTHLY ORIGINATION OVERVIEW FOR JUNE 2015

        June 2015*       May 2015*      

6 Months Ago
(Dec. 2014*)

      

1 Year Ago
(June 2014*)

Closed Loans
Purpose
Refinance       38%       42%       43%       33%
Purchase       61%       58%       56%       65%
Type
FHA       23.68%       24%       17%       21%
Conventional       63.01%       63%       67%       65%
VA       10%       10%       11%       10%
Days to Close
All       48       46       42       41
Refinance       52       49       42       39
Purchase       45       43       42       42
Percentage of ARM and Fixed Loan Volume
ARM %       4.9%       4.7%       5.8%       7.2%
15 Year %       9.7%       9.8%       9.9%       9.0%
30-Year Rate
Average       4.118%       4.013%       4.251%       4.421%

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

                       

PROFILES OF CLOSED AND DENIED LOANS FOR JUNE 2015

       

Closed First-Lien Loans
(All Types)

      

Denied Loans
(All Types)

FICO Score (FICO)       727       672
Loan-to-Value (LTV)       81       83
Debt-to-Income (DTI)       24/38       28/47

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 March 2015 applications—to calculate an overall closing rate of 64.2 percent in June 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.

The Origination Insight Report and content do not in any way contain, reflect or relate to actual Ellie Mae operational or financial performance. The Origination Insight Report and content are intended solely as a research tool for informational purposes and not as investment advice or recommendations for any particular action or investment.

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. Ellie Mae’s Encompass® all-in-one mortgage management solution provides one system of record that allows banks, credit unions and mortgage lenders to originate and fund mortgages and improve compliance, loan quality and efficiency. Visit EllieMae.com or call (877) 355-4362 to learn more.

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