As refinance share dropped to the lowest level in years, refinance credit scores have tumbled and high loan-to-value lending has diminished.
Out of all home loan applications that were initiated in the previous 90-day cycle, 55.0 percent closed in April.
The closing rate diminished from 58.0 percent in the previous report but was up from 53.2 percent in the same report during 2013.
The metrics were included in the Origination Insight Report for April 2014 from Ellie Mae Inc. The report reflects results from a 57 percent sampling of mortgage applications initiated on the Encompass origination platform.
On just refinances, the closing rate sank to 49.6 percent from 54.6 percent in March, while purchase closing rates fell to 58.8 percent from 60.7 percent.
It took 39 days to close the average loan last month, one day less than in March and seven days faster than the same month during 2013.
“Average days to close loans dipped below 40 for the first time since we’ve been reporting data, falling to 39 days in April 2014,” Ellie Mae President and Chief Operating Officer Jonathan Corr stated in the report. “That’s the third straight month that days to close a loan declined.”
Refinance turnaround was unchanged from the prior month at 37 days, while originators trimmed a day off the 41 days took to close a purchase transaction in March.
The average FICO score crept up to 726 from 725 but was much lower than 742 in April 2013.
FICOÂ scores on refinances insured by the Federal Housing Administration sank to 675 from 711 as of the same month last year, while conventional refinance credit scores tumbled to 732 from 757 over the same time frame.
Average loan-to-value ratios were unchanged at 82 percent but slightly higher than 81 percent one year prior.
On all denied applications, LTV ratios inched up to 82 percent from 81 percent but were far more conservative than 85 percent in the year-earlier report.
Ellie reported average debt-to-income ratios at 24/37 percent, the same as a month earlier but higher than 23/35 percent 12 months earlier.
FHA loans made up 22 percent of all originations for each of the three most recent months and a year earlier.
Adjustable-rate mortgages accounted for 7.6 percent of activity. ARM share widened from 7.4 percent in March and more than doubled compared to 3.2 percent in April 2013.
For three consecutive months, the share of refinances has moved lower — to 37 percent from 40 percent in March and 58 percent in April 2013.
Refinance share has not been this low since at least August 2011 — the oldest data reported by Ellie.
On conventional refinances, the share with LTV ratios of at least 95 percent has fallen to 8.0 percent from 11.6 percent in April 2013.
Borrowers who opted for 15-year mortgages represented 12.2 percent of the total population versus 12.4 percent in the prior report and 15.3 percent in the year-earlier report.
