PLEASANTON, Calif. (12/18/15)--The average time to close a loan in November increased by three days over the previous month, to 49 days total, marking the longest time to close since February 2013, according to Ellie Mae.
Ellie Mae’s latest Origination Insight Report showed that the average time of Federal Housing Administration, conventional and Veterans Affairs loans all increased, which could be due to lenders adjusting to the Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosure (TRID) regulations.
“We are beginning to see the anticipated impacts of the [TRID] changes that went into effect in October,” said Jonathan Corr, president/CEO of Ellie Mae. “The time to close loans has crept up to 49 days, a three-day increase over October, while the closing rate on purchased loans increased to 72%. Additionally, we’ve seen the percentage of refinances increase to 46% of all closed loans, most likely driven by a recent dip in rates over the last three months since the 2015 high point in August.”
The data also shows that the average FICO score on all closed loans fell to 721, marking the sixth consecutive month of decline. The driver of the FICO reduction appears to be average FHA refinance FICO scores falling for the second straight month to 648.
The Origination Insight Report mines its data from a sampling of roughly 66% of all mortgage applications that were initiated on the Encompass mortgage management solution. According to Ellie Mae, the report is a strong proxy of the underwriting standards employed by lenders across the country.