For quite some time now, economists, and self-proclaimed real estate and housing experts have drilled into our heads just how hard it is to earn the stamp of approval on a mortgage these days. Among the various reasons they typically give for this phenomenon, the one that makes the most sense, and is therefore listed more frequently than many others, is that banks are playing Scrooge with their underwriting standards.

So, let’s take a look at what the residential real estate industry’s leading provider of mortgage-lending services, Ellie Mae, had to say about that in its Origination Insight Report for December 2012, which they published on Jan. 16.

Ellie Mae’s December 2012 Origination Insight Report MortgageInfoGraphic_EllieMae

Out of all of the applicants who ultimately received the stamp of approval on their mortgage application last year, the vast majority of them – 62 percent, according to Ellie Mae’s Origination Insight Report report – were actually involved in a refinancing procedure. The remaining 38 percent of successful mortgage loan applicants were seeking to purchase a home. The report also said that the average interest rate for 2012’s approved applicants was 3.9 percent.

Some of Ellie Mae’s other interesting tidbits and notable findings include the fact that the average closing time on mortgage loans last year was 48 days, and the average applicant’s down payment was 21 percent.

CEO’s Closing Comments

Jonathan Corr, Ellie Mae’s chief operating officer, said that it appears as though the upswing in closing rates in real estate from last year is impacting the time it’s taking to close. Corr revealed that the average refinancing transaction took 57 days to complete in December 2012, which was an increase of almost one week from November of last year.

Corr added that closed conventional refinances with LTVs (loan-to-value ratios) of 95% or more – which is often a good indicator of HARP 2.0 (Home Affordable Refinance Program) activity – shot up to 11.40% in December 2012 from 9.62% in November, the highest it’s reached since Ellie Mae started tracking it in October of 2011.

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This is filed under Home Loans/ Mortgages.


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