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M R EP O RT | 17 MDWELL Where Refinances Are Getting the Greenlight What markets have the highest approval rates for refinances? A new survey finds one western market has an approval rate higher than 80%. A new study by LendingTree found that nearly 75% of mortgage refinance applications are approved nationally, and Utah has the highest approval rate in the nation at 82.4%. Utah also comes in at No. 8 in home-price appreciation and No. 19 the average consumer credit scores. "The availability of a lower interest rate is only one of the conditions needed to refi- nance a mortgage," said Tendayi Kapfidze, LendingTree's Chief Economist who led the study. "Borrowers often need to have some equity in their home, especially if they want to take cash out, and a solid credit score. Fortunately, increases in home prices since 2012, combined with paying down their loan balances, means many borrowers have built considerable equity in their homes." Home values between 2012-2018 have in- creased 39% and the average consumer credit score is 713. Following Utah was North Dakota with an approval rate of 80.5% and South Dakota at 80.1%. LendingTree reports New Mexico had the lowest approval rate at 66.5%, which is fol- lowed by Florida at 68.2%. Connecticut was the only nation that saw declines in price appreciation at -3%. New Jersey had the second-lowest appreciation at 2%, and Rhode Island and Delaware both had appreciation rates at 6%. 25 States With the Highest Refinance Approval Rates Source:: LendingTree, "75% of Mortgage Refinances Get Approved, and These States Have the Highest (and Lowest) Approval Rates" large labor pool to manage the docu- ments and execute the business rules for quality and compliance based on the data on those documents. In those discussions, we thought, "If we could pull together a totally AI- based platform, we could start to chip away at this high cost of labor." That's kind of how we proceeded, and with lots of collaboration with customers, including large mortgage companies, we've been able to build a solution that they need. M // What insights has AI Foundry taken away from its partnership with Ellie Mae? BUTLER // Ellie Mae is a prominent leading supplier of the loan origination system, which is the system of record for mortgage loans. The majority of the market is putting data into Ellie Mae's solution, called Encompass, and then taking data out that needs to be processed for providing quality and compliance testing. It's a labor-intensive process to put data in and take data out, so we're automating that. Think of us as an on-ramp to the Encompass solution. Our ability to automate all the information off of documents, and the documents themselves, and put them in the right places. M // Do you foresee more of this technology becoming common in the industry? BUTLER // Yes, definitely. The new category of technology-powered lenders are driving their internal costs lower and their loan turnaround times shorter, making them more competitive against the traditional lenders who are seeing costs continue to grow to $4,000 per loan and higher because of their lack of commitment to technology. The industry itself has to invest in automation, but the buyers also, the applicants, are demanding it. A greater percentage of homebuyers are mil- lennials, and they are looking for an improved process. The idea of supply- ing documents and waiting a couple of weeks to find out whether or not they supplied all the documents the bank needs and whether or not those docu- ments are correct and support their ap- plication…they don't want to wait two weeks. They want to know within 24 hours, and maybe even within an hour. You're only going to do that with AI and with automation. State Approval Rate Average Loan Amount Home Value Appreciation (2012-2018) 1. Utah 82.4% $248,151 39% 2. North Dakota 80.5% $192,419 60% 3. South Dakota 80.1% $182,069 32% 4. Washington 79.3% $299,509 `37% 5. Nebraska 78.8% $161,506 28% 6. Massachusetts 78.8% $302,486 19% 7. Minnesota 78.6% $207,420 21% 8. Iowa 78.6% $155,541 24% 9. Colorado 78.4% $281,363 58% 10. Oregon 78.0% $258,150 39% 11. Wisconsin 78.0% $163,851 12% 12. Idaho 77.8% $200,574 39% 13. Montana 77.4% $223,712 36% 14. Nevada 76.8% $238,825 53% 15. California 76.7% $397,359 42% 16. Michigan 76.7% $160,585 26% 17. Arizona 76.7% $223,162 37% 18. Kansas 76.2% $167,854 25% 19. Missouri 76.1% $171,272 17% 20. Wyoming 76.0% $216,942 25% 21. Hawaii 75.9% $419,372 22% 22. Rhode Island 75.3% $204,914 6% 23. New York 75.2% $291,754 10% 24. West Virginia 75.0% $145,043 25% 25. Alaska 74.8% $241,065 16%