The
interest rates on 30-year fixed rate mortgages originated in December reached
an all-time low
in ICE Mortgage Technology’s (formerly Ellie Mae’s) records, an
average of 2.93 percent and a 4-basis point decline from the November rate. The
company, in its monthly Origination Insight Report, said the note rate
for all three loan types it tracks, FHA, Conventional, and VA, were all below
3.0 percent for the second straight month. FHA and Conventional loans dropped
to 2.94 and 2.96 percent, respectively.
Each averaged 2.99 percent the prior month. The VA rate fell from 2.72 to 2.66
percent.

Refinances continued to dominate at
60 percent of originations
, down 1 percentage point from November but up from
46 percent a year earlier. The outsized share was skewed toward conventional
loans at 68 percent. Purchase loans accounted for 81 percent of FHA
originations and 70 percent of VA loans.

“Interest rates continued to decline
at the end of 2020, driving the growing share of refinances for another month,”
said Joe Tyrrell, president of ICE Mortgage Technology. “Despite the continued
impact of the coronavirus, our lenders are leveraging technology and digital
solutions
to manage borrower demand for refinances, while taking into account
the health and safety of all people as part of the mortgage origination
process.”

Conventional loans accounted for 81
percent of loans originated during the month, down 1 point from November. Ten
percent of loans were FHA and 6 percent were VA, unchanged from their shares
the prior month. Other loan types ticked up from 2 to a 3 percent share.

The time to close all loans
increased
to 58 days from 55 days in November with purchase loans, at 56 days
compared to 49 days, accounting for all the increase. The refinance timeline
remained at 59 days.

The closing rate for all loans was
76.5 percent, about a point higher than in November. ICE computes the closing
rate from a review of a sample of loan applications initiated 90 days prior, in
this case the September 2020 applications.

The Origination Insight Report‘s
data comes from a sampling of approximately 80 percent of all mortgage
applications that were initiated on the ICE proprietary lending platform. The
company says its report is a strong proxy of the underwriting standards
employed by lenders across the country.

By Jann Swanson , dated 2021-01-25 11:44:29

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Courtesy of Mortgage News Daily

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