Ellie Mae: FICO Scores Dropping as Refi Share Holds Steady

Ellie Mae, Pleasanton, Calif., said FICO scores began to dip across most loan types in November as the percentage of refinances held steady at 39 percent of total loans.

The company’s monthly Origination Insight Report said average FICO scores on all loans dropped to 722 in November from 724 in October. Refinances saw FICO scores dip across loan products. FHA refinance FICO scores dropped from 650 in October to 645 in November; conventional refinance FICO scores dropped to 730 from 732 and VA refinance FICO scores dropped to 700 from 702.

“Interest rates rose slightly in November while we saw the refinance share hold at 39 percent of all closed loans,” said Jonathan Corr, president and CEO of Ellie Mae. “Additionally, 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.”

Other statistics of note 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.

–Closing time for all loans held at 43 days for the third straight month.

–Thirty-year interest rates increased to 4.240% from 4.200% from October.

–The percentage of adjustable-rate mortgages increased to 5.6 percent.