PLEASANTON, Calif.–In this month’s report, data show that the average time to close on all loans has decreased for a fourth consecutive month to 51 days.
“The decrease in average time to close is not surprising, given the increase we have observed in the adoption of digital transformation tools, such as AIQ, our artificial intelligence offering that automates workflows for shifting to a more data-driven process, and consumer engagement suite for automating communication to all parties in the transaction,” said Joe Tyrrell, President of ICE Mortgage Technology. “This trend also aligns with findings from our 2020 Borrower and Lender Insights Survey, in which both borrowers and lenders noted that digital mortgage technologies are making it faster and easier to close a mortgage loan, thus improving the overall experience for participants.”
This month’s OIR also showed that April was the second consecutive month of slowdown in share of refinances among total originations. The percentage of refinances dropped to 56% of all closed loans in April, down from 63% in March. However, the percentage of purchases increased to 43% of total closed loans for the month of April, up from 36% in March, reflecting the highest percentage since August 2020.
Data in the Origination Insight Report is derived from a robust sampling of approximately 80% of all mortgage applications that were initiated on the Encompass® Lending Platform. The Origination Insight Report serves as a proxy of the underwriting standards employed by lenders across the country.
MONTHLY ORIGINATION OVERVIEW FOR APRIL 2021
| April 2021* | March2021* | 6 Months Ago(October 2020*) | 1 Year Ago(April 2020*) | |
| Closed Loans | ||||
| Purpose | ||||
| Refinance | 56% | 63% | 60% | 65% |
| Purchase | 43% | 36% | 40% | 35% |
| Type | ||||
| FHA | 10% | 9% | 10% | 10% |
| Conventional | 81% | 83% | 82% | 81% |
| VA | 6% | 3% | 5% | 6% |
| Days to Close | ||||
| All | 51 | 52 | 54 | 42 |
| Refinance | 53 | 52 | 57 | 39 |
| Purchase | 49 | 51 | 48 | 46 |
| Percentage of ARM and Fixed Loan Volume | ||||
| ARM % | 3.1% | 2.4% | 2.4% | 3.8% |
| 30-Year Rate | ||||
| Average | 3.22% | 2.99% | 2.99% | 3.48% |
*All references to months should be read as month ended.
PROFILES OF CLOSED LOANS FOR APRIL 2021
| Closed First-Lien Loans (All Types) | |
| FICO Score (FICO) | 747 |
| Loan-to-Value (LTV) | 72 |
| Debt-to-Income (DTI) | 23/35 |
More information and analysis of closed and denied loans by loan purpose and investor are available in the full report at https://www.icemortgagetechnology.com/mortgage-data/origination-insight-reports
To provide a meaningful view of lender pull-through, ICE Mortgage Technology reviewed a sampling of loan applications initiated 90 days prior—or the January 2021 applications—to calculate an overall closing rate of 78.0% in April 2021 (see full report).
In addition to the Origination Insight Report, ICE Mortgage Technology also distributes data from its monthly Millennial Tracker on the first Wednesday of each month. The Millennial Tracker focuses on mortgage applications submitted by borrowers born between the years 1980 and 1999.
About the Origination Insight Reportby ICE Mortgage Technology
The Origination Insight Report focuses on loans that closed in a specific month and compares their characteristics to similar loans. The closing rate is calculated on a 90-day cycle rather than on a monthly basis because most loan applications typically take one-and-a-half to two months from application to closing. Loans that do not close could still be active applications or applications withdrawn by consumers or denied for incompleteness or non-qualification.
The Origination Insight Report details aggregated, de-identified data pulled from the Encompass origination platform.
News organizations have the right to reuse this data, provided that ICE Mortgage Technology is credited as the source.
ICE Mortgage Technology combines technology, data and expertise to help automate the mortgage process, from consumer engagement through loan registration, and every step and task in between. ICE Mortgage Technology is the leading cloud-based loan origination platform provider for the mortgage industry, with solutions that enable lenders to originate more loans, lower origination costs, and reduce the time to close, all while ensuring high levels of compliance, quality and efficiency. Visit icemortgagetechnology.com or call (877) 355-4362 to learn more.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks to connect people to opportunity. We provide financial technology and data services across major asset classes that offer our customers access to mission-critical workflow tools that increase transparency and operational efficiencies. We operate exchanges, including the New York Stock Exchange, and clearing houses that help people invest, raise capital and manage risk across multiple asset classes. Our comprehensive fixed income data services and execution capabilities provide information, analytics and platforms that help our customers capitalize on opportunities and operate more efficiently. At ICE Mortgage Technology, we are transforming and digitizing the U.S. residential mortgage process, from consumer engagement through loan registration. Together, we transform, streamline and automate industries to connect our customers to opportunity.
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