Ellie Mae Weighs in on Originations

On Wednesday, Ellie Mae released its November Origination Insight Report—revealing an increase in the percentage of Adjustable Rate Mortgages (ARMs) at 8.9 percent, the highest rate recorded since 2011.

The report gathers data from a sampling of about 80 percent of all mortgage applications. According to the release, Ellie Mae believes the Origination Insight Report is a “strong proxy of the underwriting standards employed by lenders across the country.”

Data indicated that the rise in ARMs is directly correlated to the 30-year rate, which went up to 5.15 in November, compared to 5.01 the month prior. For FHA, the 30-year rate increased to 5.19 in November. Conventional rates also reflected an increase from 5.03 in October to 5.17 in November. VA rates reflected an increase from 4.83 to 4.99, the report noted.

Jonathan Corr, President, and CEO of Ellie Mae said, “As interest rates continue to rise, we are seeing the percentage of Adjustable Rate Mortgages rise in lockstep, and this month they’ve risen to the highest percentage we’ve seen since we began tracking data.” He also indicated that the steady decline of refinances at 30 percent in November was expected due to higher interest rates.

Additionally, the time to close all loans increased to 46 days, a slight increase from the last month at 45 days. wherein the time to close purchase loans increased to 48 days, while the time required to close a refinance remained at 43 days for the second consecutive month.

Overall the percentage of purchase loans went up by 70 percent of total loans last month—an increase from 68 percent the month prior. For three months in a row, FICO scores on all closed loans remained steady at 727 in November. LTV is steady at 79 for the fourth month while DTI held at 26/39 for the second month.