Credit Standards Loosen, Refi Boom to Blame

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Posted To: MND NewsWire

Ellie Mae has picked up indications of what it says it will be watching as a possible trend in the data from its November Origination Insight Report. The company notes that the share of refinancing originations during the month remained steady at 39 percent even with a slight uptick in interest rates. However, the FICO scores of borrowers who were refinancing declined slightly across all loan types. For all loans, the FICO scores declined from an average of 724 in October to 722, but the lender breakdown shows the change was due almost entirely to refinances . For example, FICO scores were unchanged for FHA purchase loans, but declined from 645 to 640 for refis. Conventional purchase loans saw FICO scores decline by 1 point but refis by 2. VA’s purchase loan average rose 1 point but its refi…(read more)

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