Markets & Economy

Ellie Mae: Mortgage credit continues to ease

Whether lenders are actually relaxing standards remains subject to debate

The average FICO credit score for mortgages approved in March was down slightly from a year ago, a sign lenders are continuing to ease up on underwriting, according to a report from mortgage origination software company Ellie Mae Inc. The 743 average FICO score mortgages approved in March was the lowest since August 2011, when Ellie Mae began tracking and the average stood at 741. The average credit score for the first quarter overall was 746, compared to a 748 average for 2012 overall. Approved borrowers made down payments averaging 19 percent last month, the lowest since May 2012, with front-end debt-to-income ratios of 23 percent and back-end DTIs of 35 percent. By contrast, those whose applications were denied had an average FICO score of 702 in March, with borrowers willing to make down payments averaging 15 percent. The average front-end debt-to-income ratio was 27 percent; the average back-end DTI was 44 percent, unchanged from last year's average DTIs. The average FICO...