Tag Archives: Mortgage Credit Availability

“Credit availability declined in December to the lowest level since 2012, as ongoing industry consolidation is resulting in more loan programs being removed from the marketplace,” said Joel Kan, MBA’s VP and Deputy Chief Economist.

Driven by increased activity in the jumbo mortgage market, the MBA reported mortgage credit availability on the rise to begin Q4, as lenders have begun to offer more ARM products to offset mortgage rates that reached nearly 8% in the second half of October.

The MBA's Mortgage Credit Availability Index revealed that August's share of mortgage credit availability was on the upswing after a decrease in July, which resulted in the lowest level of credit availability recorded since 2013.

“Mortgage credit availability declined to its lowest level since 2013, as lenders pulled back on underutilized loan programs and as liquidity concerns remain for some jumbo lenders,” said Joel Kan, MBA’s VP and Deputy Chief Economist. "Declining origination volumes have led to lower profitability for many lenders, resulting in narrower loan product offerings to reduce operational costs.

The MBA reports that mortgage credit availability fell for the third straight month in May, dropping to levels last recorded in January 2013.

According to a new report from the Mortgage Bankers Association, a decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

For the first time in nine months, the MBA reports that mortgage credit availability increased in November, driven by a spike in the interest of ARM loans amid a declining rate environment.

As investors continue to reduce their offerings of ARM and non-QM loan programs and with overall origination volume forecast to constrict, the MBA found mortgage credit availability on the decline once again in August.

“Credit availability fell last month to the lowest level since May 2013, as lenders streamlined their loan offerings in this declining volume environment,” said Joel Kan, MBA’s Associate VP of Economic and Industry Forecasting.

Mortgage credit availability fell slightly in June, according to the MBA, as mortgage rates reacted to the Fed’s actions in raising the nominal interest rate to curb inflation.