As conservator for Fannie Mae and and Freddie Mac, the Federal Home Finance Agency gets access to a bevy of mortgage-related closing information including average mortgage rates for U.S. mortgage applicants and detailed HARP mortgage statistics.
For mortgage application information, however, the FHFA falls short. For that, private-sector firm Ellie Mae is a go-to provider. Ellie Mae is on the application-end of more than 2 million mortgage applications per year, more than 20% of all U.S. mortgage originations.
According to Ellie Mae, the number of mortgage application denied in underwriting is increasing. Fewer mortgage applicants are ever making it to closing.
For July 2012, Ellie Mae reports that 45.8 percent of all loan applications reached the settlement table, a 0.4 drop from the month prior and a substantial drop from November 2011, the first month for which the origination software firm tracked such data.
Fewer than half of today's mortgage applicants close.
The good news, though, is that the mortgage standards aren't affecting applicants equally. Mortgage denials are overwhelmingly biased in favor of refinancing households. July's home buyers were approved at the highest rate in six months.
An improving U.S. economy and a rise in the average buyer's "credit profile" likely contributed to improving purchase application numbers. A rash of HARP mortgage applications, for which approval rates can be low, likely contributed to the falling refinance approval rate.
HARP accounts for one-third of all closed refinance transactions.
Nationwide, demand for mortgages remains high. The lowest mortgage rates of all-time are attracting first-time home buyers and move-up buyers alike; and refinance demand has been strong across all loan types including for the FHA Streamline Refinance and VA Streamline Refinance, as well as for conventional and jumbo mortgage refinance.
HARP mortgage activity has been strong, too.
If you've been looking at a home to purchase, or wanting to refinance your existing home loan, Ellie Mae's data shows us you're not alone. Millions of mortgage applications will be processed this year and many will be successful. If you've been turned down in the past, don't let it deter you.
Many mortgage applications that are denied through underwriting on the first attempt are approved on the second or third, the result of investor overlays.
If at first you don't succeed, apply, apply again.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2014 Conforming & FHA Loan Limits
Mortgage loan limits for every U.S. county,
as published by Fannie Mae & Freddie Mac, and the FHA.