Ellie Mae said the interest rate across all closed
loans droppedĀ  below 3 percent for the
first time in the nine years
the company has been tracking the data. Ellie Mae is
now a part of ICE Mortgage Technology, a division of Intercontinental Exchange,
Inc., a NYSE listed firm.

The company’s Origination Insight Report shows that
the 30-year note rate for VA loans was 2.75 percent, 3 basis points lower than
in September, while the Conventional rate dipped from 3.02 percent to 3.01
percent and FHA loans held steady at 3.01 percent. The rate across all loans was
2.99 percent.

With rates so low, refinances
continued to dominate
originations, reaching 60 percent of total closed loans
in the month, up from 58 percent in September. This bested the 2019 high, which
also was in October, by 9 percentage points but is well below the peak 2020
share of 65 percent in both April and May.

Conventional loans ticked back up in
October, from 80 percent in September, to 82 percent of all closed loans. The
VA share dropped to 5 percent from 6 percent and the FHA share remained at 10

“We are continuing to see interest
rates decline now dipping below three percent for the first time since we have
tracked this data,” said Joe Tyrrell, president, ICE Mortgage Technology. “The
market clearly remains ripe for refinances as 60 percent of all closed loans
are refis this month, indicating that homeowners are still looking to capitalize
on the opportunity to reduce their monthly payments.”

Tyrrell continued, “FICO scores
remain high
and conventional loans represent 82 percent of all closed loans
this month. Homeowners should continue to educate themselves on the various
available products to determine what best fits their needs. We will watch to
see how the data shifts as we continue into the fall and the global pandemic
and election impact the economic outlook.”

The time to close all loans
increased to 54 days in October, up from 51 days in September. Time to close
for purchase loans increased to 48 days in October, up from 47 days in September
and jumped from 54 days to 57 days for refinances.

Closing rates decreased slightly to
76.7 in October, down from 77.1 in September. Ellie Mae calculates closing rates
from a review of a sampling of loan applications initiated 90 days prior, in
this case June 2020.

The Origination Insight Report mines
data from a sample of approximately 80 percent of all mortgage applications
that were initiated on its mortgage management system. The company says its
report is a strong proxy of the underwriting standards employed by lenders
across the country.

By Jann Swanson , dated 2020-11-19 17:27:20

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Courtesy of Mortgage News Daily

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