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Home >> Daily Dose >> Mortgage Origination Report Shows FICO Scores Dropping Across Loan Products
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Mortgage Origination Report Shows FICO Scores Dropping Across Loan Products

FICO scores dipped across most loan types in November according to the Origination Insight Report released by Ellie Mae, a cloud-based platform provider for mortgage providers, on Wednesday. The report focuses on loans that closed in a specific month and compares their characteristics to similar loans that closed three and six months earlier.

The report noted that the percentage of refinances held steady at 39 percent of total loans. Average FICO scores on all loans dropped to 722 in November from 724 in October.

According to the report, refinances saw FICO scores dip across loan products with the FHA refinance scores dropping from 650 in October to 645 in November. Conventional refinance FICO scores dropped to 730 in November from 732 in the month prior and VA refinance scores also dropped to 700 from 702 in October.

“We saw FICO scores drop modestly, especially across refinances, indicating that lenders may be loosening credit standards to attract the dwindling refinance market. This is certainly a trend we will continue to watch into the winter months,” Jonathan Corr, president and CEO of Ellie Mae said.

The report also noted that in November the percentage breakdown of all closed loans remained steady with conventional loans at 66 percent, FHA loans at 20 percent and VA loans at 10 percent.

The closing time for all loans held at 43 days for the third straight month according to the report which is published monthly. Thirty-year interest rates increased marginally from 4.20 percent to 4.24 percent in November and the percentage of ARMs increased to 5.6 percent, the report said.

“Interest rates rose slightly in November while we saw the refinance share hold at 39 percent of all closed loans,” Corr said.

To read the entire origination report click here.

About Author: Radhika Ojha

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Radhika Ojha, Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. She can be reached at [email protected]

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