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Mortgage Demand Picks Up for Ellie Mae in May

Demand for mortgages increased in May, according to a report released by ""Ellie Mae"":http://www.elliemae.com/ Wednesday.

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The Origination Insight Report for May 2012 showed that the average loan-to-value (LTV) on closed loans jumped up above the 80 percent mark for the first time since the company began tracking in August 2011. Ellie Mae attributed the increase to an easing of LTVs on conventional refinances.

The average LTV on conventional refinance in May was 72 percent, a slide up from April's 69 percent. Closed conventional refinances with LTVs of 95 percent

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or higher jumped up to 11 percent in May, a large increase over 7.1 percent in April and 3.6 percent in March. An increase like that could be a sign that HARP 2.0 is helping more borrowers, said Ellie Mae COO Jonathan Corr.

In order to have a meaningful view of lender ""pull-through,"" Ellie Mae reviewed a sample of loan applications initiated in February to calculate a closing rate for May. The company found that 47.2 percent of all applications closed in May, compared to April's 48.1 percent.

The percentage of purchase loans increased to 46 percent, the highest level of the year but not unexpected for the spring sales season, said Corr. Credit scores for closed loans experienced a slight decrease to 744 in May. The biggest drop was in FHA refinances, where the average credit score declined to 713 from April's 720.

The average loan in May closed in 46 days, one day longer than April. The average refinance closed in 48 days-again, one more than in April. Corr said the slight increase stems from higher interest in mortgage and refinance activity.

""The combination of record-low interest rates, flexible HARP 2.0 refinances and a growing perception that housing prices finally may have bottomed are all creating increased demand-and slightly longer waits-for mortgages,"" said Corr.

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