Mortgage Daily Logo

Lending Standards, Turn Times Fall on Waning Refis

Mortgage News

Lending standards loosened and turn times shortened last month as refinance share diminished and refinance closing rates tumbled.

Of all mortgage loan applications that were started during the previous 90-day cycle, just 53.1 percent closed in August.

The closing rate deteriorated from the previous month, when it was 55.4 percent. However, an improvement was made compared to the 47.8 percent closing rate reported for August 2012.

Those findings were reported Wednesday by Ellie Mae based on transactions that were processed through its systems.

The deterioration reflected refinance activity, with the closing rate on just refinance loans tumbling to 46.8 percent from 51.3 percent in July. Refinance closing rates were likely impacted by rising interest rates — pushing unlocked prospects out of the market.

The closing rate on purchase-money loans, however, inched up to 61.5 percent from 61.4 percent.

At 41 days, the amount of time it took to close loans improved by six days compared to July and was eight days faster than in August 2012.

Turnaround on refinances sped up to 41 days from the prior month’s 48 days, while purchase financing time frames shortened to 42 days from 46 days.

Borrowers had an average FICO score of 734 last month, lower than 737 in July and 750 a year prior.

At the same time, average debt-to-income ratios rose to 24/37 from 24/36 a month earlier and 23/34 in August 2012.

Even average LTV ratios rose — to 82 percent from the prior month’s 81 percent and 79 percent in the same month last year.

However, on refinance loans insured by the Federal Housing Administration, average LTV ratios slipped to 85 percent from 86 percent in July, while the average rose to 74 percent from 72 percent on conventional refinances.

The higher conventional refinance LTVs reflected a bigger share of transactions with 95 percent LTVs — rising to 13.4 percent from 11.1 percent a month earlier and 7.74 percent a year earlier.

Average credit scores on all types of denied applications fell to 696 from 702 in July, while DTIs and LTVs were unchanged at 28/44 and 84 percent, respectively.

FHA loans represented 18 percent of business during the latest month. FHA share was off from 19 percent a month earlier and 21 percent a year earlier.

Refinances accounted for 43 percent of August activity, falling for the third consecutive month and down from 47 percent in July. The year-earlier refinance share was 61 percent.

Falling refinance share pushed the purchase financing share of business to 57 percent — the highest level on record based on Ellie’s data back to August 2011.

Related Posts

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

There is No Such Thing as a Free House …

Over the past several years, those who service loans in the State of Washington(1) have seen a dramatic rise in the number of lawsuits in which delinquent borrowers seek to quiet title to their homes on the grounds that lenders are barred from foreclosing based on...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

The Mortgage Graveyard 2018 Archives

The Mortgage Graveyard 2018 Archives Failed, Struggling and Acquired Mortgage-Related Companies Non-Bank Closures 3 Bank Failures (FDIC) 0 Credit Union Failures 0 Total Mortgage-Related Failures 3  

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

MBS Statistics

MBS Statistics Non-Agency Issuance 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990 Private Label RMBS Issuance (S&P) $80 billion to $100 billion (est) $70 billion $34...

NewDay USA CEO Rob Posner Expects 10% Increase in 2019 Mortgage Loan Volume

Sample E-Mail

Sample E-Mail   Covering the Real Estate Finance Since 1999  Mortgage Industry News free news content | view headlines online  Advertorial Text Ad This ad includes a linked bold headline of up to 50 characters and up to 100 words of text. The ad can be...

Popular posts

How Long Does It Take to Refinance a Mortgage
How Long Does It Take to Refinance a Mortgage

So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...

How Does Refinancing a Mortgage Work
How Does Refinancing a Mortgage Work

A home purchase is considered an investment, and a robust one at that. Savvy owners are constantly looking for new ways to reduce debt, save money, pay less in interest, and ultimately build equity. Refinancing is one way to leverage your investment and do just that....

What Does It Mean to Refinance Your Home
What Does It Mean to Refinance Your Home

You can think of refinancing your mortgage as a debt redo. Essentially, you’ll swap out the existing loan for a new one - ideally with better terms and conditions. Only this time it could help you save money on high mortgage payments, rather than just borrow it....

Setting up the Utilities in My New House
Setting up the Utilities in My New House

All the tedious, time-consuming home closing documents have been signed, sealed, and delivered. Your belongings are packed into what seems like a million boxes and you have a solid plan to haul all your existing furniture to the new place. Just as your boxes and...

When Is My First Mortgage Payment Due?
When Is My First Mortgage Payment Due?

Navigating your way through a brand new mortgage loan can be a difficult task, especially for first time homeowners. After handing over a large sum of money for the down payment and closing costs, it’s important to pay attention to the timing of your first mortgage...

Newsletter

Don’t worry, we don’t spam

calculate your monthly mortgage payment

Related Topics

Helpful Links

Daily mortgage rate trends

Best mortgage lenders

First-time homebuyers programs by state

Loan limits by state

Types of mortgages

APR vs interest rate

Understanding PMI