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January ICE Mortgage Technology Origination Insight Report Shows Continued Refinance Market Growth as Interest Rates Further Decline

Interest rates on all closed loans continued to decline in January to 2.88 percent, down from 2.93 percent in December, according to the latest Origination Insight Report from ICE Mortgage Technology™, a division of Intercontinental Exchange, Inc. (NYSE: ICE) and the leading cloud-based loan origination platform provider for the mortgage industry.

Declining interest rates were seen across all loan types in January. The 30-year rate on conventional loans continued its steady decline, dropping to 2.91 percent from 2.96 percent in December. Similarly, the 30-year rate on FHA loans fell to 2.86 percent in January, down from 2.94 percent in December. The 30-year rate on VA loans dropped to 2.60 percent in January, down from 2.66 percent in December.

As rates dropped, the percentage of refinances continued to increase, representing 67 percent of closed loans, up from 60 percent in December 2020.

Other statistics of note in January included:

  • The time to close all loans held steady at 58 days from December to January
  • Average FICO scores on all loans slightly increased, returning to 752 after dipping to 751 in December
  • Conventional refinance FICO scores increased to 764 on average, up from 763 in December

“Interest rates continued to decline in January, driving up the share of refinances by seven percent,” said Joe Tyrrell, president of ICE Mortgage Technology. “We’re continuing to keep an eye on average FICO scores as many lenders tighten credit during this time of rising loan volume. We continue to see growth on our Encompass Lending Platform, indicating that our lenders are utilizing digital mortgage technology to serve their customers and close these record number of loans as quickly as possible.”

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 JANUARY 2021

January 2021*

December

2020*

6 Months Ago

(July 2020*)

1 Year Ago

(January 2020*)

Closed Loans

Purpose

Refinance

67%

60%

54%

50%

Purchase

32%

39%

46%

50%

Type

FHA

9%

10%

11%

16%

Conventional

84%

81%

79%

71%

VA

5%

6%

6%

8%

Days to Close

All

58

58

47

48

Refinance

59

59

50

48

Purchase

57

56

44

48

Percentage of ARM and Fixed Loan Volume

ARM %

2.3%

2.4%

3.0%

6.3%

30-Year Rate

Average

2.88%

2.93%

3.24%

3.96%

*All references to months should be read as month ended.

PROFILES OF CLOSED LOANS FOR JANUARY 2021

Closed First-Lien Loans
(All Types)

FICO Score (FICO)

752

Loan-to-Value (LTV)

71

Debt-to-Income (DTI)

23/34

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 October 2020 applications—to calculate an overall closing rate of 76.2 percent in January 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.

About ICE Mortgage Technology

ICE Mortgage Technology, a division of Intercontinental Exchange, Inc. (NYSE: ICE), combines the innovation and expertise of Ellie Mae, Simplifile and MERS to automate the entire mortgage process from consumer engagement through loan registration and every step and task in between. Ellie Mae, as part of 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.

© 2021 Ellie Mae, Inc., doing business as ICE Mortgage Technology. All rights reserved. Encompass®, Millennial Tracker™, and the ICE Mortgage Technology logo are trademarks of the entities of ICE Mortgage Technology.

Contacts:

Sara Holtz
ICE Mortgage Technology
(925) 227-2193
sara.holtz@elliemae.com

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