New data from San Francisco-based Ellie Mae revealed that credit standards had loosened this year, as compared to the previous year.
Even with credit requirements remaining virtually the same month-over-month, the average FICO score (credit score) on all loans closed in February 2013 was at 724; this is 21 points less than the average of 745 in February 2013. Also in February 2014, 33 percent of all closed loans had FICO scores of less than 700, a figure that increased from the 24 percent share recorded in February 2013.
Further, Ellie Mae disclosed in its Origination Insight Reportthat 57 percent of all mortgages in February were purchases, an increase from 53 percent the month prior. Refinances, on the other hand, took up only 43 percent of all mortgages last month, down from the previous month’s 47 percent; this marked a continuing trend of refinance activity declining as interest rates rise.
According to Ellie Mae President and CEO Jonathan Corr, this was the first time in four months wherein the purchase share increased month-over-month, as well as the largest monthly uptick since August 2013.
Apart from refinance and purchase shares and average FICO scores on loans closed, Ellie Mae also tracks note rates on its analytic report. According to the new analytics, 30-year average note rates dropped to 4.655 percent in February from 4.723 in January, marking the first time this happened since November 2013. This figure nonetheless remained much higher than it was a year ago, when the average note rate for 30-year products was 3.723 percent.