The process of refinancing took less time last month than it did in October, cutting overall turnaround. But the improvement came at the expense closing ratios.
The closing rate was 52.3 percent in November based on applications started 90 days prior.
That wasn’t as good as the previous month, when the closing rate was 54.5 percent. But it was better than in November 2011, when 47.1 percent of pending applications closed.
Ellie Mae, which reported the data based on transactions processed through its Encompass360 mortgage management software and Ellie Mae Network, said that last month’s refinance closing rate was 48.0 percent, worse than 51.3 percent in October.
The closing rate on purchase applications slipped to 60.8 percent from 61.2 percent.
It took 50 days to close the average loan last month, speeding up from 54 days in October. But turn times have slowed considerably from just 46 days in November 2011.
The improvement from October in time to close was concentrated in refinance transactions, which sped up to 51 days from 57 days. Purchase turnaround, however, slowed to 48 days in November from 47.
FICOÂ scores on loan production averaged 750 in November, the same as the previous three months. Credit scores averaged 748 in the year-earlier period.
There wasn’t much difference in average FICOÂ scores on denied applications, which inched up to 707 from 706 in October.
Average loan-to-value ratios on closed business crept up to 79 percent from 78 percent in October and 76 percent in November 2011.
But on denied applications, average LTV ratios slipped to 86 percent from October’s average of 87 percent.
Conventional refinances with LTV ratios of 95 percent or more accounted for 9.6 percent of November’s originations. The share widened from 8.6 percent a month earlier and 2.1 percent a year earlier.
Borrowers who closed on their loans last month had an average debt-to-income ratio of 23/34 percent, unchanged for four consecutive months. Average DTI ratios were 24/35 percent this month last year.
On denied applications, average DTI ratios haven’t changed in two months at 27/44 percent.
Refinance share slipped to 68 percent from October’s 69 percent but was still greater than a year earlier, when the share was 64 percent.
Loans insured by the Federal Housing Administration accounted for 19 percent of November’s activity, unchanged two months in a row. FHA share has fallen, however, from a quarter during the same month in 2011.
Two percent of business during the latest month was adjustable-rate mortgages, narrowing from the 2.2 percent ARM share in October and the 5.3 percent ARM share in the same month last year.
