Ellie Mae Releases March Origination Analysis

April 24, 2012

Ellie Mae released its second monthly report analyzing the mortgage origination market, which compares data amassed from loan applications in its database for March compared to February 2012 and September and December 2011.

Ellie Mae said there were two million loan applications processed through its systems in 2011 and the survey is based on a "robust" sample of those applications.

Here’s a summary of the Origination Insight Report for March 2012:

  • Sixty-one precent of loans originated in March were for the purpose of refinancing, about the same as three and six months previous but down from 67 percent in February. FHA-backed loans accounted for 28 percent and conventional loans for 64 percent of the total compared to 25 percent and 67 percent in February.
  • A typical loan regardless of its purpose took 42 days to close in March, about the same as in February but down three to five days from December.
  • The majority of loans were 30-year fixed-rate loans (FRM) but 20.2 percent were 15 year notes and 4.2 percent were adjustable rate mortgages (ARMs.) The incidence of ARMs has decreased in each of the reporting periods since September when they had a 6.0 percent market share. The average note rate for a 30-year FRM has declined steadily from 4.412 in September to 4.080 in March.
  • The average loan closed in March had a FICO score of 749, a loan-to-value (LTV) ratio of 77 percent and a debt-to-income (DTI) ratio of 23/35. A loan that was denied had a FICO on average of 699, an 85 percent LTV, and a DTI of 27/43.
"In March, as we moved into the Spring selling season, underwriting standards for both purchase and refinance loans continued to be highly conservative,” said Jonathan Corr, chief operating officer of Ellie Mae. “The average loan denial in March still had a FICO score just shy of 700, and more than 15% in equity or a down payment. On average, there was an 8-point spread between back-end DTI ratios for approved-versus-denied loans last month."

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