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Data Shows Shift in Mortgage Credit Availability

Mortgage credit availability decreased 1.2 percent in February as program offerings in the conventional mortgage space affected the overall availability of credit, bringing the index down to 180.7.

The MBA unveiled this data along with other findings in their latest monthly report on the Mortgage Credit Availability Index (MCAI). Declines in index numbers are indicative of a crackdown on lending standards, while increases usually indicate a loosening of credit.

Conventional Mortgage Credit Availability Index loans decreased by 2.5 percent, while credit availability for conforming MCAI loans fell 2.1 percent. The month-to-month decline in February made for a continued pattern from September, where investors put out more products one month but pulled back the next month.

Lynn Fisher, VP of research and economics for the MBA said a change in program offerings from a single large investor in the conventional space played a big part in the decline. Fisher went on to say that the February decline brought the jumbo component index to year-end levels and the conforming component to levels comparable to last October.

Contrastly, in January, MCAI increased 2.1 percent to 182.9. The conventional MCAI rose 3.6 percent, and the Government MCAI rose 0.9 percent. Component indices of the Conventional MCAI increased from the previous month, with the Jumbo MCAI going up 6.1 percent more than the Conforming MCAI (which went up 1.1 percent).

The Conforming and Jumbo indices have matching base levels as the total MCAI, while the Conventional and Government indices have adjusted base levels. In 2012, mortgage credit index was 100, an exceptionally tight number. The decline was caused by tightening in the conventional space.

Conventional, Government, Conforming, and Jumbo MCAIs are designed to show general credit risk for each index.

The MCAI is calculated using numerous factors related to borrower eligibility. These factors include credit score, loan type, and loan-to-value ratio. Metrics and underwriting criteria of 95 lenders and investors are combined by MBA to calculate the MCAI.

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