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The percentage of closed conventional refinances with loan-to-value ratios of 95% or more declined for a second straight month to 8.7% in July from 10.2% in June, indicating that HARP 2.0 activity is slowing, according to mortgage technology firm Ellie Mae.
In May, mortgages with loan-to-value ratios of at least 95% experienced a refinancing spike, the Pleasanton, Calif.-based firm said.
The firm mines data from a sampling of about 33% of all mortgage applications initiated on its origination technology platform. Mortgage originators use Ellie Mae's Encompass360 software for about 20% of the nation's mortgages.
Ellie Mae also found that the July closing rate for purchase loans slightly increased for the third month in a row up to 58.7% from 57.8% in June and 56.8% in May, “a sign that the purchase market may also be showing some traction,” said Jonathan Corr, chief operating officer of Ellie Mae.
“The combination of extremely low interest rates and a strengthening purchase market pushed out closing times for both refinance and purchase loans in July. These time frames are similar to what we saw in January of last year, when a surge of activity challenged the industry’s capacity," Corr added
After reviewing a sampling of loan applications initiated 90 days prior to July (April), Ellie Mae found that 45.8% of all applications closed in July compared to 46.2% in June.
Provided by Ellie Mae:
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