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Mortgage Credit Availability Rose In January: MBA

Mortgage credit availability increased in January according to the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association.

The MCAI rose 2.3 percent to 179.0 in January. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI increased (4.9 percent), while the Government MCAI was unchanged. Of the component indices of the Conventional MCAI, the Conforming MCAI increased by 7.3 percent, and the Jumbo MCAI increased by 3.0 percent.  The report analyzes data from Ellie Mae’s AllRegs.

Joel Kan

“There was an increase in the supply of mortgage credit in January, which was a reversal from the December pullback that was caused by the end of the Home Affordable Refinance Program and a reduction in jumbo offerings,” said Joel Kan, MBA’s associate vice president of economic and industry forecasting. “Last month, investors and lenders added more programs to cater to lower credit score borrowers, in addition to new relief refinance programs. These relief refinance programs are not a direct replacement for HARP but do serve a similar purpose to assist borrowers who may have run into financial challenges.”

The MCAI increased 2.3 percent to 179.0 in January. The Conventional MCAI increased (4.9 percent), and the Government MCAI was unchanged. Of the component indices of the Conventional MCAI, the Conforming MCAI increased by 7.3 percent, and the Jumbo MCAI increased by 3.0 percent.

The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index.

The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine. The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs.

The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits, while the Conforming MCAI examines conventional loan programs that fall under conforming loan limits.

 

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