Credit Access Opens Up for Jumbo Loans

Mortgage credit availability opened up in March as lenders made moves toward the jumbo market.

The Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) increased 0.44 percent last month to 114.0, the group reported Tuesday, indicating a loosening of credit.

While lending regulations have played a role in credit shifts over the past few months, MBA chief economist Mike Fratantoni explained March’s increase had more to do with lenders refocusing their priorities.

“Consistent with past months, many lenders and investors are providing borrowers seeking higher loan amounts with a broader range of financing options by introducing new jumbo loan programs,” Fratantoni said. “Over the month, some lenders made a complete exit from wholesale lending operations, while other lenders moved to enter that space or expanded operations.”

MBA says the increased availability in jumbo loan programs is consistent with findings in its Weekly Applications Survey, which has shown growth in purchase volume for high-loan applications and contraction in volume for low-balance loans.

“Lenders are likely moving to create a broader range of jumbo products in order to capture the increasing demand for such financing in the market,” the group said.