Purchase loans continued to increase as a percentage of loan originations in April. Ellie Mae’s Origination Insight Report for the month put the purchase share of all closed loans at 52 percent, a 6 percentage point jump from March and the first time in 2015 that more than half of loans were originated for that purpose.
Seventy-two percent of FHA loans were for purchasing, also a 6 point month-over-month increase but significantly lower than the 80+ percent share of its loans that went for purchasing every month from May 2014 through January 2015. Fifty-eight percent of conventional loans were originated for purchasing and 68 percent of VA loans.
Of all loans originated in April 64 percent were conventional, 24 percent FHA, 9 percent VA and 3 percent were classified as “other.”
Ellie Mae noted that the percentage of FHA refinances that had a greater than 95 percent loan-to-value (LTV) ratio dipped from 41.6 percent in March to 38.1 percent. The company did not comment as to whether this may be related to the new 97 percent LTV loans offered by Fannie Mae and more recently by Freddie Mac but the share of high LTV conventional loans did rise month-over-month from 4.3 to 5.2 percent.
The company said that the number of days required to close a loan in April were the most since January 2014, likely due to higher than expected origination volume. It took an average of 45 days to close a loan with refinances averaging 48 days and purchase loans 43 days.
The closing rate for all loans was 65.2 percent, exceeding 65 percent for the first time since Ellie Mae began tracking that information in August 2011.
Reference JANN SWANSON