Mortgage applications decreased 3.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Feb. 8, 2019.

The Market Composite Index, a measure of mortgage loan application volume, decreased 3.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 4 percent compared with the previous week. The Refinance Index decreased 0.1 percent from the previous week.

The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 5 percent lower than the same week one year ago.

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“Application activity fell last week--even with rates decreasing--as renewed uncertainty about the domestic and global economy likely held potential homebuyers off the market,” said Joel Kan, associate vice president of industry surveys and forecasts of the MBA. “Despite the recent decline in applications, we still expect that the continued strength of the job market and lower rates will support more purchase activity in the coming months.”

The refinance percentage of mortgage activity increased to 43.2 percent of applications, from 41.6 percent the previous week. The adjustable-rate mortgage share of activity decreased to 7.5 percent of applications.

The Federal Housing Administration percentage of applications increased to 11 percent, from 10.5 percent the week prior. The Veterans Affairs percentage of applications increased to 11 percent, from 10 percent the week prior. The Department of Agriculture percent of applications increased to 0.6 percent, from 0.5 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($484,350 or less) decreased to 4.65 percent from 4.69 percent, with points decreasing to 0.43 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $484,350) decreased to 4.48 percent from 4.50 percent, with points decreasing to 0.27 from 0.28 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 4.61 percent from 4.70 percent, with points decreasing to 0.53 from 0.57 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

“The 30-year fixed-rate mortgage dropped to its lowest level since last March and was 52 basis points lower than its recent high last November,” said Kan. “Government refinances provided a bright spark, picking up over 10 percent, as both FHA and VA refinancing activity saw increases over the week.”

The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.04 percent from 4.11 percent, with points increasing to 0.48 from 0.47 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.97 percent from 4.04 percent, with points increasing to 0.42 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

Optimal Blue has created Optimal Blue Mortgage Market Indices to provide consumers and mortgage professionals with greater visibility into key drivers of mortgage pricing. OBMMI was designed with the aim of providing an unprecedented level of daily insight into mortgage transactions.

Based on actual locked rates with consumers across more than 30 percent of mortgage transactions across the U.S., OBMMI offers a comprehensive, accurate, timely, and interactive analysis of mortgage pricing.

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“This is an important milestone in Optimal Blue’s transformation from a pricing engine to a digital mortgage marketplace,” said Scott Happ, CEO of Optimal Blue. “We are uniquely positioned to introduce these new benchmarks and trust they will be of value to a broad range of participants looking for transaction-based mortgage price data.”

In this groundbreaking inaugural release of OBMMI, Optimal Blue provides multiple mortgage rate indices developed around the most popular mortgage loan products and specific borrower attributes. Each of the 16 mortgage indices are represented with the national average of mortgage rates locked by consumers each day and include the change from the previous day.

Indices can be compared through compelling interactive and configurable visualizations. For example, users can easily select pre-defined or custom-time periods to isolate specific market movements or illustrate unique trends, such as the well documented jumbo-conventional spread inversion that exists.

“Complete with the industry’s largest product and pricing library and backed by an unparalleled commitment to accuracy, Optimal Blue’s platform ensures that consumers are presented with the best-fit financing alternatives and that lenders consistently deliver the best price,” said Bob Brandt, vice president of marketing and strategic alliances at Optimal Blue. OBMMI will help both audiences better understand trends and pricing in the mortgage market.”

Optimal Blue operates a secondary marketing automation platform.

Ellie Mae has entered into a definitive agreement to be acquired by Thoma Bravo LLC, a private equity investment firm, in a cash transaction that values Ellie Mae at around $3.7 billion.

Under the terms of the agreement, Ellie Mae shareholders will receive $99.00 in cash per share. The price per share represents a 47 percent premium to the 30-day average closing share price and 49 percent premium to the 60-day average closing price as of Feb. 1, 2019.

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“Since the founding of Ellie Mae more than 20 years ago, our mission has been simple--to automate everything for the residential mortgage industry,” said Jonathan Corr, president and CEO of Ellie Mae. “As we enter this next phase of our digital mortgage journey, we are thrilled to provide immediate value to our shareholders. With the investment and support from Thoma Bravo, we will remain committed to our customers’ success, innovation and growth of the Encompass Digital Lending Platform while maintaining our position as a best place to work.”

[caption id="attachment_9349" align="alignleft" width="242"] Jonathan Corr[/caption]

“Ellie Mae delivers powerful and innovative mortgage technology solutions across every channel of the residential mortgage sector, enabling lenders to originate more loans while reducing costs and driving efficiency, quality and compliance throughout the mortgage process,” said Holden Spaht, a managing partner at Thoma Bravo. “Ellie Mae is leading the digital transformation of the residential mortgage industry and we look forward to building on the company’s successes and to our partnership through this next chapter of growth.”

Ellie Mae’s board unanimously approved the definitive agreement and recommended that stockholders vote their shares in favor of the transaction. Ellie Mae’s headquarters will remain in Pleasanton, California, with regional offices across the U.S. Closing of the transaction is subject to approval by Ellie Mae stockholders and regulatory authorities and the satisfaction of customary closing conditions. The transaction is expected to close in the second or third quarter of 2019 and is not subject to a financial condition.

The agreement includes a 35 day “go-shop” period, which permits Ellie Mae’s Board and advisors to actively initiate, solicit, encourage, and potentially enter negotiations with parties that make alternative acquisition proposals.

Ellie Mae will have the right to terminate the merger agreement to enter into a superior proposal subject to the terms and conditions of this merger agreement.

There can be no assurance that this 35 day “go-shop” will result in a superior proposal, and Ellie Mae does not intend to disclose developments with respect to the solicitation process unless and until the board makes a determination requiring further disclosure.

J.P. Morgan Securities LLC is serving as the exclusive financial advisor to Ellie Mae and Cooley LLP is serving as the legal advisor to Ellie Mae. Jefferies LLC served as financial advisor to Thoma Bravo and Kirkland & Ellis LLP served as legal advisor to Thoma Bravo. Financing for the transaction is being provided by Jefferies Finance LLC.