As refinances took up a smaller share of monthly residential loan originations, government share widened, and loan approvals got easier.
Conventional loans accounted for 63 percent of all mortgages that were originated during February — the thinnest share since
August 2015.
Conventional share of residential production was two-thirds the previous month, while it was 65 percent during the same month last year.
Ellie Mae Inc. delivered the metrics in its February 2017 Origination Insight Report. The findings are reportedly derived from a 75 percent sampling of loan applications processed through the Encompass origination platform.
The share of production that was for loans insured by the Federal Housing Administration widened to 23 percent last month from 21 percent in January and 22 percent in February 2016.
Mortgages guaranteed by the Department of Veterans Affairs made up a tenth of the latest activity. VA share broadened from 9 percent a month earlier and a year earlier.
February 2017’s closing rate declined to 70.6 percent from 72.2 percent in the previous report but improved from 69.9 percent the same month in 2016. The latest month’s closing rate was 65.4 percent on refinance transactions and 75.9 percent on purchase financing.
Of all conventional mortgage applications started in the previous 90-day cycle, 70.8 percent had closed as of last month. FHA’s closing rate was 69.1 percent, and the VA closing rate was 65.0 percent.
It
took 46 days to close the average loan in February 2017, five days fewer than the previous month and the same as a year previous. Refinance turnaround was 47 days, while purchase turn times averaged 45 days.
Conventional time to close was 46 days last month, FHA mortgages took 45 days, and VA turnaround was 48 days.
The average FICO score dropped two points from January to 720, though credit scores were no different than in February 2016.
Credit scores averaged 728 on conventional refinances in February 2017 and 752 on conventional purchases. On FHA transactions, credit scores averaged 649 on refinances and 686 on purchases.
The average score was 702 on refinances of VA loans and 707 on VA purchase financing.
Last month’s average loan-to-value ratio was 79 percent, up from 78 percent one month earlier and unchanged from 12 months earlier.
Conventional LTV ratios came in at 66 percent on refinancings and 80 percent on purchase-money mortgages. FHA ratios were 78 percent on refinances and 96 percent on purchase financing.
The average was 88 percent on VA refinances and 98 percent on VA purchases.
Debt-to-income ratios averaged 25/40 percent in February 2017, loosening from 25/39 percent in the previous report and a year previous.
Conventional refinances had an average 26/41 percent DTI ratio, and conventional purchases averaged 23/35 percent. DTI ratios on FHA refinances were 29/47 percent, while purchases average 28/43 percent.
At 26/41 percent on VA refinances, DTI ratios were slightly higher than 25/41 percent on VA purchases.
Refinance transactions accounted for 43 percent of all originations last month. Refinance share thinned from 47 percent in January and 46 percent in February 2016.
February 2017’s refinance share was 52 percent on conventional loans, 25 percent on FHA business and 35 percent on VA transactions.
