ELLI Ellie Mae, Inc.

Ellie Mae® (NYSE Amex: ELLI), a leading provider of enterprise level, on-demand automated solutions for the residential mortgage industry, today released a new monthly report on the state of the origination market. The report draws its data and insights from a robust sampling of the significant volume of loan applications—more than 20% of all originations in the U.S.—that flow through Ellie Mae’s Encompass360® mortgage management software and Ellie Mae Network™.

Going forward, the Company intends to issue the Origination Insight Report on the third Wednesday of each month to provide fresh insight regarding the current lending environment for existing refinance and purchase mortgages.

 

Monthly Origination Overview for February 2012

     

Month EndedFebruary2012

 

Month EndedNovember2011

 

Month EndedAugust2011

Closed Loans               Purpose             Refinance   67%   64%   61% Purchase   33%   36%   39% Type             FHA   25%   25%   29% Conventional   67%   67%   62% Days to Close             All   44   46   40 Refinance   43   42   37 Purchase   44   46   43 ARM %   4.3%   5.3%   8.3% 15 Year %   19.6%   19.7%   18.3% 30 Year – Note Rate   4.095   4.258   4.639  

Profiles of Closed and Denied Loans for February 2012

     

Closed First-Lien Loans(All Types)

 

Denied Loans(All Types)

FICO Score (FICO)   750   699 Loan-to-Value (LTV)   76   83 Debt-to-Income (DTI)   23/34   28/44

More information and analysis of closed and denied loans, by loan purpose and investor, is available at http://www.elliemae.com/aboutus/about_reports.asp.

To get a meaningful view of lender “pull-through,” Ellie Mae reviewed loan applications initiated within the previous 90 days to calculate a closing rate and found that nearly 48% of all applications closed. There was a higher percentage of purchase mortgages closing (60%) than refinances (42%).

“In February, it appears that lenders continued to be very cautious in terms of credit quality, down payments and valuations,” said Jonathan Corr, chief operating officer of Ellie Mae. ”The average credit score on closed loans was 750 last month, up from 740 six months ago; meanwhile, the average loan-to-value ratio was 76%, a decrease of 3% from August’s average.

“If you look at the full report on our website, you’ll see the impact of the higher underwriting requirements for refinance that were in place in February,” Corr said. “Last month, if your FICO score was below 720 or you had a down payment or equity of less than 25%, there was a good chance that your refinance application for a conventional loan was denied or you were offered a significantly less attractive interest rate. The average DTI ratio for such a denial in February was 27/43.

“The timeline from application to closing for the average loan was 44 days in February and 43 for a refinance, a 10% and 16% increase, respectively, over where the industry was six months ago,” Corr added. “This tracks with the increase in demand that we saw at year end.”

About Ellie Mae Origination Insight Report

In 2011, the total volume of mortgages that ran through Ellie Mae’s Encompass360 mortgage management software was approximately two million loan applications, or 20% of all U.S. mortgage originations. The Origination Insight Report mines its application data from a robust sampling of approximately 33% of all mortgage applications that were initiated on the Encompass origination platform. Given the size of this sample and Ellie Mae’s market share, the Company believes the Origination Insight Report is a strong proxy of the underwriting standards that are being employed by lenders across the country.

The Origination Insight Report focuses on loans that closed or were denied in a specific month and compares their characteristics to similar loans that closed or were denied in the prior three-month and six-month periods. The closing rate is calculated on a 90-day cycle, rather than a monthly basis, because most loan applications typically take one and a half months to two months from application to closing. Loans that do not close could still be active applications, withdrawn by consumer, or denied for incompleteness or non-qualification.

News organizations have the right to re-use this data, provided that Ellie Mae, Inc. is credited as the source.

About Ellie Mae

Ellie Mae, Inc. is a leading provider of on-demand automation solutions for the mortgage industry. The Company offers an end-to-end solution, delivered using a Software-as-a-Service model that serves as the core operating system for mortgage originators and spans customer relationship management, loan origination, and business management. The Company also hosts the Ellie Mae Network™ that allows mortgage professionals to conduct electronic business transactions with the lenders and settlement service providers they work with, to process and fund loans. The Company's offerings include the Encompass®, Encompass360® and DataTrac® mortgage management software systems.

Ellie Mae was founded in 1997 and is based in Pleasanton, California. To learn more about Ellie Mae, visit www.EllieMae.com or call 877.355.4362.

© 2012 Ellie Mae, Inc. Ellie Mae®, Encompass®, Encompass360®, DataTrac®, Ellie Mae Network™ and the Ellie Mae logo are registered trademarks or trademarks of Ellie Mae, Inc. or its subsidiaries. All rights reserved. Other company and product names may be trademarks or copyrights of their respective owners.