December 23rd, 2013
According to Ellie Mae, refinance activity bounced back in November as a result of lower interest rates.
The “Origination Insight Report” found that refinances accounted for 45 percent of all loan originations in November, up from 39 percent in October and 42 percent in September. Refinance activity still has a way to go to catch up to November 2012′s activity – 68 percent of all loan originations – but the month-over-month increase was beneficial.
“Refinances increased by six percentage points in November, the first time in 10 months refinance share increased on a month-over-month basis,” said Jonathan Corr, president and CEO of Ellie Mae. “This 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.”
Corr also stated that HARP refinancing saw improvements in November, the first increase seen in three months. Conventional finances with loan-to-value ratios exceeding 95 percent went up from 7.3 percent in October to 8.3 percent in November.
Lending standards have been more favorable to homebuyers in regard to credit scores. In November, the average FICO score for all closed loans was 729, down from an average of 750 in the previous year. The proportion of closed loans with scores below 700 was 30 percent, an increase from 22 percent in November 2012.