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Closing Rates Rise in February, Purchase Activity Makes Strides

Closing rates on mortgages rose to their highest level in more than a year in February as credit standards eased off somewhat.

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""Ellie Mae"":http://www.elliemae.com/ released on Wednesday its ""Origination Insight Report"":http://elliemae.uberflip.com/i/116334/0 for February, revealing that the closing rate for loan applications initiated 90 days prior--in November--was 56.8 percent. February's rate was the highest it's been in the history of Ellie Mae's reports, which began in 2011. January's closing rate was an even 55.0 percent.

Jonathan Corr, Ellie Mae's president and COO, expanded on the findings.

""The purchase market is strengthening as the run-up begins for the spring buying season, rising from 27 percent of all closed loans in January 2013 to 32 percent in February 2013,"" Corr said. ""Time to close improved considerably, dropping to 50 days in February 2013 from 54 days in January 2013.""

Corr also observed that HARP 2.0 ""continues to show traction with conventional refinances at 95-plus LTV [loan-to-value ratio] rising for the sixth month in a row to 12.1 percent ... the highest level since we began tracking in October 2011.""

Meanwhile, the average FICO, LTV, and debt-to-income (DTI) statistics for closed loans showed signs of easing in standards. The average FICO score for a loan closed in February was 745, down from 749 in January, while the average LTV was 80 percent, up from 79 percent. The average DTI was 23/35 from 23/34 previously.

For denied loans, the average FICO score was 705 (from 707 in January), LTV was 85 percent (flat month-over-month), and DTI was 27/43 (from 27/44).

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