A report [1] released Thursday by the Mortgage Bankers Association [2] (MBA) shows that mortgage credit availability was down slightly in April, which means a tightening of standards in the mortgage industry.
The results, which analyze data from the AllRegs [3] Market Clarity product, come through MBA’s Mortgage Credit Availability Index (MCAI). These results showed that the MCAI index decreased by 0.18 percent to 113.8 from March to April. Credit availability is, however, still above the index benchmark of 100, which was set in March of 2012.
This is the first time since November that MBA has reported a decrease in the MCAI.
Since the beginning of the year, the index has either remained flat or has increased month-to-month, indicating loosening standards. However, much of the loosening MBA has reported on in the last few months concerns products such as jumbo mortgages and not standard home loans, which, thanks in part to a growing housing market and stricter lending rules, are putting more pressure on average homebuyers.
"There continues to be countervailing trends in the data,” said Mike Fratantoni, MBA’s chief economist. “On one hand, credit continues to be more available to jumbo borrowers, particularly those seeking adjustable rate mortgages, and we are beginning to see some loosening within conventional and FHA programs for conforming loans. On the other hand, some investors shut down or tightened criteria for certain programs.”
The MBA report comes on the heels of a survey [4] of senior loan officers by the Federal Reserve [5], which found that credit standards have remained largely unchanged (and tight) on basic prime mortgage products over the latest quarter, even though the demand for these products has waned.