Ellie Mae reports a drop in HARP 2.0 activity

By Sari R. Updated on 9/20/2012

Ellie Mae reports a drop in HARP 2.0 activity, due to declining loan-to-values (LTV), that is, LTV ratios of 95% or more. In August, the percentage of refinances that closed was 7.74%, down from July’s 8.7%, following a three month trend in falling LTV numbers.

Ellie Mae Chief Operating Officer, Johnathan Corr, proposes that this is “a possible sign that HARP 2.0 continues to be cooling off, which is in line with what the Federal Housing Finance Agency has been reporting”.

However, in May of this year there was a refinancing spike in mortgages with LTV ratios of 95% or more.

The buying market seems to be gaining ground as, according to Ellie Mae, the closing rate for purchase loans experienced a fourth month consecutive increase; in July the rate was at 58.7%, in August it jumped to 60.1%.

Refinancing closing rates also climbed, up 40.9% in August from 37.9% in July. Additionally, the average time to close a refinance rose from 48 to 51 days.

From their review of a selection of loan applications, Ellie Mae reports that 47.5% of applications closed in August; comparatively, only 45.8% of applications closed in August. These applications had all been filed in May, 90 days before time of closure in August.