The Flip Side of Weak
Lending: Higher Pull-Through Rates
Weak demand for home loans is helping lenders become more proficient, improving their ability to close loan applications in a shorter period of time. Lenders are spending fewer man-hours processing loans that do not result in a home sale. Mark Fleming, chief economist at the data and analytics firm CoreLogic, says, "We're not doing a lot of sales and those (borrowers) that do apply appear to be pulling through." Although 45 percent of loan applications were not funded or approved in April, Ellie Mae reports the average pull-through rate fell from 58 percent in March to 55 percent in April. Meanwhile, it took 39 days on average to close a loan in April, compared with 40 days in March and a high of 55 days in December 2012. Closed loans had an average FICO score of 726, a loan-to-value ratio of 82 percent, and a total debt-to-income ratio of 37 percent, compared with an average FICO score of 680, an LTV ratio of 82 percent, and a total debt-to-income ratio of 44 percent for denied loans.
From "The Flip Side of Weak Lending: Higher Pull-Through Rates"
American Banker (06/03/14) Berry, Kate
Weak demand for home loans is helping lenders become more proficient, improving their ability to close loan applications in a shorter period of time. Lenders are spending fewer man-hours processing loans that do not result in a home sale. Mark Fleming, chief economist at the data and analytics firm CoreLogic, says, "We're not doing a lot of sales and those (borrowers) that do apply appear to be pulling through." Although 45 percent of loan applications were not funded or approved in April, Ellie Mae reports the average pull-through rate fell from 58 percent in March to 55 percent in April. Meanwhile, it took 39 days on average to close a loan in April, compared with 40 days in March and a high of 55 days in December 2012. Closed loans had an average FICO score of 726, a loan-to-value ratio of 82 percent, and a total debt-to-income ratio of 37 percent, compared with an average FICO score of 680, an LTV ratio of 82 percent, and a total debt-to-income ratio of 44 percent for denied loans.
From "The Flip Side of Weak Lending: Higher Pull-Through Rates"
American Banker (06/03/14) Berry, Kate
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