MBA: Mortgage Credit Availability Up for 1st Time in 9 Months
Mortgage credit availability increased in November—the first monthly increase since February—the Mortgage Bankers Association reported Thursday.
The MBA Mortgage Credit Availability Index MCAI rose by 1.4 percent to 103.4 in November. The Conventional MCAI increased 2.8 percent, while the Government MCAI remained unchanged. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 3.9 percent, and the Conforming MCAI rose by 1.0 percent.
“Credit availability increased slightly in November, the first increase in nine months, as lenders continued to navigate a challenging environment brought on by higher rates and a much slower housing market,” said Joel Kan, MBA Vice President and Deputy Chief Economist. “Jumbo credit availability saw a 4 percent increase, as jumbo rates remained more competitive than rates on conforming loans. Lenders are seeking to capture more volume in this space. Most of last month’s increase came from more ARM loan programs being offered.”
The MCAI analyzes data from ICE Mortgage Technology. 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.
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 ICE Mortgage Technology, 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.