The MBA released a report Tuesday indicating an increase of mortgage credit availability. Based on their Mortgage Credit Availability Index (MCAI), mortgage lenders are loosening their lending standards for those seeking a tax credit. MBA used analyzed data from the Ellie Mae’s AllRegs Market Clarity business information tool to produce the report.
After starting at a benchmark of 100 in March 2012, the total MCAI saw an increase of 0.7 percent to 181.4 percent in September. The MCAI looks at four component indices; Conforming, Conventional, Government and Jumbo which all experienced an increase. The Conforming and Conventional MCAI had an equal increase of 1.5 percent, while Government and Jumbo experienced an increase of 0.2 percent and 1.4 percent respectively.
The MCAI utilizes several factors to determine, including borrower credit score, loan type, loan-to-value ratio, and so on. To calculate the MCAI, MBA uses data from the AllRegs Market Clarity product by combining those metrics and underwriting criteria for borrower eligibility from over 95 investors and lenders. It then uses a proprietary formula to calculate a summary measure which indicates mortgage credit availability at a point in time.
“Mortgage credit availability increased in September due to continuing updates to conforming loan programs as well as agency jumbo programs that have been phased in over the last few months” said Lynn Fisher, MBA’s VP of Research and Economics. A particular highlight of the report shows an increase in jumbo space, while non-jumbo space saw a more humble gain in recent months.
Both the total and component MCAIs are designed to show relative credit risk/availability, but the main difference lies in the population of loan programs they examine. The Government MCAI focuses on FHA/VA/USDA loan programs while the Conventional, Jumbo, and Conforming MCAI focuses on non-governmental programs.