Last month’s closing rate for home loans was the lowest since at least 2011. Loan production employees cut the time it takes to close a loan for the second consecutive month.
The average home loan took 40 days to close last month. Turnaround improved for the second month in a row from 41 days in February.
In March of last year, there were 46 days needed from start to finish to complete the processing and closing of a residential loan transaction..
The statistics were presented Wednesday by Ellie Mae Inc. in its Origination Insight Report March 2014. The report summarized production data based on a sample of 57 percent of last month’s transactions initiated on the Encompass origination platform.
Improvement in closing times was concentrated in refinance activity, which fell to 37 days from 40 days
A one-day gain in purchase turnaround left the average for purchase at 41 days.
March saw a closing rate of 58.0 percent on residential loan production. The closing rate is the share of applications started in the prior 90-day cycle that closed.
Last month’s ratio was the highest on record based on the oldest available data back to November 2011. It was also better than February’s 55.3 percent and March 2013’s closing rate of 55.1 percent.
Closing rates on refinances surged to 54.6 percent from 47.0 percent in February.
But purchase transactions had deterioration, with the closing rate declining to 60.7 percent from 62.0 percent.
Average FICOÂ scores inched up to 725 from 724 but sat well below the 743 average in place during March 2013.
No change from the previous report left the average loan-to-value ratio at 82 percent and barely more than the 81 percent as of 12 months prior.
Average LTV ratios on conforming refinances fell to 72 percent from 74 percent in February, likely reflecting less activity from the Home Affordable Refinance Program.
At 24/37, average debt-to-income ratios on all loans were more conservative than the 25/38 ratio in February but more risky than 23/35 percent in the year-earlier period.
DTI-ratios on denied applications declined to 28/44 percent from 28/45 percent.
Refinance share fell to 40 percent in March from 43 percent the prior month. A year prior, the share was 62 percent.
No change in the share of Federal Housing Administration-insured loans had FHAÂ share at 22 percent. In March 2013, FHAÂ share was 21 percent.
Adjustable-rate mortgage share was 7.4 percent, widening from 6.9 percent in the last report and 2.5 percent in the year-earlier period.
