ICE Mortgage Technology’s Latest Origination Insight Report Shows Significant Reduction in Time to Close
ICE Mortgage Technology reported a notable decrease in the average time to close loans during the first quarter of 2021, reducing from 58 days in January to 52 days in March. Closing rates improved for all loans, increasing from 76.4% in February to 77.9% in March, while the percentage of refinances dropped from 68% to 63%. The report highlights a shift in consumer behavior towards homeownership and refinancing, indicating a competitive market for new buyers. The data was derived from a robust sampling of mortgage applications through the Encompass platform.
- Decrease in average loan closing time from 58 days to 52 days (Jan to Mar 2021).
- Closing rates improved from 76.4% in February to 77.9% in March.
- Increased percentage of home purchase loans from 32% to 36% of closed loans.
- Percentage of refinances dropped from 68% to 63% of closed loans.
- A competitive purchase market may emerge due to high refinance volumes.
ICE Mortgage TechnologyTM, a leading global provider of data, technology and market infrastructure, today shared that the time to close all loans decreased over the first quarter of 2021, from 58 days in January to 52 days in March, according to the March Origination Insight Report. Time to close all purchase loans decreased over the quarter, from 57 days in January, to 53 days in February, and down to 51 days in March. Refinances saw similar decreases in days-to-close, falling from 59 days in January, to 52 in both February and March.
“We’re seeing a compelling reduction in the time to close a mortgage as we continue into 2021,” said Joe Tyrrell, president of ICE Mortgage Technology. “Part of the reason is lenders are continuing to adopt digital mortgage tools to improve their loan origination process and serve homebuyers more efficiently, for example eClose, which makes for a more streamlined process that saves time, and that shift is showing up in the data.”
Closing rates increased slightly for the month on all loans increasing from 76.4 percent in February to 77.9 percent in March and closing rates on refinances increased from 76.3 percent to 78.0 percent month-over-month. Closing rates on purchases increased from 77.1 to 78.1 percent, respectively.
The percentage of refinances dropped from 68 percent of all closed loans in February to 63 percent of all closed loans in March. The percentage of purchases increased to 36 percent of total closed loans for the month of March, up from 32 percent the month prior.
“After months of near record numbers of refinances, it is clear that the pandemic has shifted how people view their homes and in doing so, prompted homeowners to refinance, often in order to access the equity,” said Tyrrell. “As we enter the summer home buying months, if we continue to see higher than normal refinance volumes, as some homeowners commit to staying in their current homes, it will mean new buyers face an even more competitive purchase market driven by tight supply.”
The Origination Insight Report leverages data from a robust sampling of approximately 80 percent of all mortgage applications that were initiated on the Encompass® Lending Platform. ICE Mortgage Technology believes the Origination Insight Report is a strong proxy of the underwriting standards employed by lenders across the country.
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.
MONTHLY ORIGINATION OVERVIEW FOR MARCH 2021 |
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March 2021* |
February 2021* |
6 Months Ago (September 2020*) |
1 Year Ago (March 2020*) |
Closed Loans |
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Purpose |
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Refinance |
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Purchase |
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Type |
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FHA |
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Conventional |
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VA |
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Days to Close |
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All |
52 |
53 |
51 |
40 |
Refinance |
52 |
52 |
54 |
35 |
Purchase |
51 |
53 |
47 |
45 |
Percentage of ARM and Fixed Loan Volume |
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ARM % |
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30-Year Rate |
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Average |
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*All references to months should be read as month ended. |
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PROFILES OF CLOSED LOANS FOR MARCH 2021 |
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Closed First-Lien Loans
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FICO Score (FICO) |
751 |
Loan-to-Value (LTV) |
71 |
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 get a meaningful view of lender pull-through, the company reviewed a sampling of loan applications initiated 90 days prior—or the December 2020 applications—to calculate an overall closing rate of 77.9 percent in March 2021 (see full report).
About the Origination Insight Report by 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 automate the entire 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 the highest 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.
Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading “Key Information Documents (KIDS).”
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 -- Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors in ICE's Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on February 4, 2021.
© 2021 Ellie Mae, Inc., doing business as ICE Mortgage Technology. All rights reserved. Encompass® and the ICE Mortgage Technology logo are trademarks of the entities of ICE Mortgage Technology.
Source: Intercontinental Exchange
View source version on businesswire.com: https://www.businesswire.com/news/home/20210427005408/en/
FAQ
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