ICE Mortgage TechnologyTM, part of Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today issued its Origination Insight Report (OIR) for April 2021. 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* |
March 2021* |
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.
