Ellie Mae’s report shows purchase market rebound

We have more news about a market rebound in June. Motivated by the favorable interest rates, borrowers with better credit helped fuel a purchase mortgage market rebound in June initiating a trend that may persist, according to recent Ellie Mae Origination data.

The Origination Insight Report mines data from a sampling of approximately 80% of all mortgage applications initiated on Ellie Mae’s Encompass platform by lenders across the country.

The purchase market began to rebound in June, accounting for 42% of all closed loans in the month, up from 35% in May, the report notes. The increase changed the purchase-refinancing ratio, as refinances accounted for the remaining 58% of closed loans, down from 65% in May.

FICO scores on all loans increased to 751 in June, up from 750 in May. FICO scores also increased month-over-month for both purchase and refinances across Conventional, Federal Housing Administration (FHA) and Veterans Administration (VA) loans.

Other borrower profile characteristics for first-lien mortgage loans of all types closed in June 2020 include loan-to-value (LTV) ratio of 73% and debt-to-income ratio of 23%/35%.

“It does appear that lenders are looking for borrowers with better credit across all mortgage products as FICO scores have continued to increase across the board since March,” said Jonathan Corr, president and CEO of Ellie Mae.

A key driver however is improved affordability as interest rates on all closed loans continue to decline, according Ellie Mae. In June, the interest rate fell three basis points to 3.40%, from 3.43% in May. The 30-year rate on VA loans remains the lowest by loan type. It dropped to 3.20% in June, from 3.24% in May.

The 30-year rate on conventional loans – the most popular product, representing 80% of all loans originated in June and 82% in May – was 3.42%, down from 3.44% in May.

“Interest rates decreased for the sixth consecutive month and we’re seeing a rebound in the purchase market which now represents 42% of all closed loans, a seven percent increase from May,” explained Corr. “Homebuyers are taking advantage of these historically low rates to both buy and refinance.”

For all loans, it took 47 days to close in June 2020, up from 45 days the prior month, and 42 days in June 2019, but one day faster compared to 48 days needed in December 2019. The time to close purchase loans declined from 47 days in May to 46 days in June, while for refinances increased from 44 to 48 days in June.

Ellie Mae reviews a sampling of loan applications initiated 90 days prior to calculate an overall closing rate – rather than on a monthly basis – because most loan applications typically take one-and-a-half to two months from application to closing.

Based on applications initiated in March 2020, closing rates dropped to 73.4% in June 2020, down from 76% in May. Loans that do not close could still be active applications or withdrawn applications.

Leader Bank closes $2B res loans in first half of 2020

Congrats to Boston-area lender, Leader Bank. Leader Bank N.A., a $1.5 billion asset, nationally chartered bank based in Arlington, Mass., announced that its residential lending department closed over $2 billion in mortgage loans, to more than 5,300 residential lending customers, in the first six months of 2020.

After closing 2019 as the top local residential lender in Massachusetts “for total number of loans and dollars lent,” Leader Bank noted in a statement, the company saw a surge in mortgage refinancing, home equity and purchase loan applications during 2020, driven by low interest rates and aided by new loan programs.

Recent events have put a financial strain on many families, said Jay Tuli, president of Leader Bank. “We are happy that we have been able to work with so many customers to find lending solutions that enable them to purchase or refinance their homes. We hope that our new products further aid our customers,” alongside the best rates available.

At the same time, the statement notes, despite the current upheaval in the financial markets, “Leader Bank is committed to meeting the continued high demand for residential lending products, especially for new home purchases.”

Currently the bank continues to review its offerings and announced “products specifically designed to assist customers looking to enter the summer purchase market” to take advantage of record low interest rates and other residential lending offers.

“Our goal remains to assist homeowners and homebuyers to find mortgage programs that fit their unique needs,” said Tuli, including a range of loan amounts as well as fixed and variable rate options.

Founded in 2002, Leader Bank serves seven full-service branches in Arlington, Belmont, Boston, Burlington, and Cambridge.

Boston National to use Black Knight’s eSign & fulfillment tech

Boston National Title (BNT), the title services division of Incenter, a Blackstone Portfolio Company, has elected to use electronic signature closing and document fulfillment software Expedite developed by Black Knight, Inc. to enhance digital title and settlement processing.

Lenders, settlement agents and consumers can securely collaborate online and have the option to use the solution with the portals, source systems and document providers they currently use, the homeownership specialty fintech said.

Expedite features include enhanced workflow and automated decision-making capabilities designed to support the mortgage and consumer loan closing process. The eClosing and document fulfillment portal enables users to convert documents for hybrid closings, and secure online document package upload, review and sharing among the title agent, consumer and lender – consolidating multiple processes.

Over the past few months, primarily in response to the COVID-19 health crisis, “Boston National introduced two novel closing solutions including our Front Porch Closings,” said John Keratsis, founder and CEO of BNT. “Adding Black Knight’s Expedite documentation preparation and sharing capabilities to our digital settlement and closing process will allow us to deliver a more collaborative and streamlined experience for our lenders, borrowers and signing agents.”

BNT also uses Black Knight’s Exchange platform, which enables lenders and their choice of service providers to connect and do business electronically through a secure, standardized system, the company said.

In addition, BNT said it recently extended another Black Knight contract for the TitlePoint research solution, which supports high-volume property analysis and combines title, tax, document images and starter records into comprehensive search packages.

“Boston National Title continues to see value in adopting our advanced loan processing capabilities,” said Rich Gagliano, president of Black Knight Origination Technologies. “The Expedite suite of solutions will help Boston National Title to further simplify workflows and support their fully digital closing process.”

Licensed in 42 states and the District of Columbia, with direct partnerships in the remaining eight states, BNT supports all forms of mortgage originations and real estate transactions.

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