October 21st, 2012 3:02 PM by Steve Iltis
For the first time this year, lenders actually closed on more mortgage applications than they rejected in September. The closing rate was one of several positive signs for borrowers in Ellie Mae’s latest Origination Insight report.
September also saw purchase mortgages account for the largest share of closings this year, some 61 percent compared to 45.3 percent for refinance loans. The market share of conventional loans also increased to a high for the year, 72 percent, as borrowers continued to move away from FHA loans, a trend that began in April at the height of the home buying season.
“In September, the share of conventional loans continued to outpace FHA loans,” said Jonathan Corr, chief operating officer of Ellie Mae. “This is mostly likely the result of HARP 2.0 initiatives as well as increases in FHA insurance premiums that took effect in April 2012.
“While closing rates for all loans rose last month, it was the closing rate for refinances that jumped significantly: from 40.9 percent in August 2012 to 45.3 percent in September 2012. This is also reflected in the increased time to close, up from 51 days in August 2012 to 53 days in September 2012, for refinances,” Corr added.
The originations report draws its data and insights from a robust sampling of the significant volume of loan applications—more than 20 percent of all originations in the United States—that flow through Ellie Mae’s Encompass360® mortgage management software and Ellie Mae Network™. The Origination Insight Report mines its application data from a robust sampling of approximately 33 percent of all mortgage applications that were initiated on the Encompass origination platform.