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Refinance Share Rebounds in November

A slight decline in mortgage rates spurred refinance activity up in November, ""Ellie Mae"":http://www.elliemae.com/ revealed in its latest monthly ""Origination Insights Report"":http://www.elliemae.com/origination-insight-reports/origination-insight-report-november-2013/#?page=0.


November's report, which uses a sampling of data from loan applications initiated in August--shows refinances accounting for about 45 percent of loans closed throughout the month. It was the first time since January that Ellie Mae's network saw a rise in refinance share.

Jonathan Corr, president and COO of Ellie Mae, said the increase ""was probably attributable to the quarter of a point decline in the interest rates on the 30-year note in November, which declined to 4.526.""


""HARP [Home Affordable Refinance Program]-related refinancing activity also increased, as conventional refinances at 95 percent-plus LTV [loan-to-value ratio] rose to 8.30 percent in November from 7.30 percent in October,"" he continued.

The closing rate on refinances also increased, rising 8 basis points to 45.4 percent. The purchase closing rate was up to 59.1 percent, up 2.2 percentage points; calculated together, the overall loan closing rate was 53.1 percent in November, up from 51.4 percent and the highest rate since August.

""Credit requirements also continued to loosen,"" Corr added. ""The average FICO score for all closed loans in November 2013 was 729, compared to 750 in November 2012. Also, 30 percent of closed loans had an average FICO score below 700 in November 2013, compared to 22 percent in 2012.""

The average loan-to-value (LTV) ratio for all loans closed in November was 81 percent--the third straight month at that level.

For denied applications, the average FICO score was 694 in November, up five points from October, while the average LTV was 82 percent, down a percentage point and the lowest ratio since November 2011.


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