MBA: Mortgage Credit Availability Up in February; 6th Straight Increase

Mortgage credit availability rose again in February, the sixth straight monthly increase, the Mortgage Bankers Association reported this morning.

The MBA Mortgage Credit Availability Index, which analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool, increased by 0.4 percent to 177.8 in February. Of the four component indices, the Government MCAI saw the greatest increase in availability (up by 2.3 percent), followed by the Conforming MCAI (up by 0.1 percent). The Conventional MCAI decreased by 2.2 percent while the Jumbo MCAI decreased by 4.4 percent.

A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

“Credit availability loosened slightly in February, due to the net result of two countervailing movements,” said MBA Vice President of Research and Economics Lynn Fisher. “The supply of credit increased as more investors offered affordable low down payment mortgages and streamlined documentation loans guaranteed by the Federal Housing Administration and the Veterans Administration. However, the impact of that increase on the overall index was partially offset by the first downturn in the availability of jumbo credit in a year due to the consolidation of some jumbo programs.”

Expanded Historical Series

The Total MCAI has an expanded historical series which gives perspective on credit availability going back 10 years (expanded historical series does not include Conventional, Government, Conforming or Jumbo MCAI). The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the past 10 years–this includes the housing crisis and ensuing recession. Data prior to March 31, 2011, was generated using less frequent and less complete data measured at six-month intervals and interpolated in the months between for charting purposes. Methodology on the expanded historical series from 2004 to 2010 has not been updated.

About the Mortgage Credit Availability Index
The MCAI provides the only standardized quantitative index solely focused on mortgage credit.

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for more than 95 lenders/investors are combined by MBA using data made available via the AllRegs Market Clarity product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time. Base period and values for total index is March 31, 2012=100; Conventional March 31, 2012=73.5; Government March 31, 2012=183.5.

To learn more about the Ellie Mae AllRegs Market Clarity platform visit http://answers.allregs.com/MCAI-Market-Clarity. For more information on the Mortgage Credit Availability Index, including Methodology, Frequently Asked Questions and other helpful resources, visit www.mba.org/MortgageCredit or contact MBAResearch@mba.org.