MBA: Mortgage Credit Availability Increased In January

Mortgage credit availability increased slightly in January, according to the Mortgage Bankers Association's Mortgage Credit Availability Index (MCAI) report.

Credit availability increased 1.85% compared to December. More specifically, the index increased to 113.0 in January, up from 110.9 in December.

A decrease in the MCAI – which analyzes data from the AllRegs Market Clarity product – indicates that lending standards are tightening, while an increase indicates that credit is loosening. The index was benchmarked to 100 in March 2012. If it had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available at that time.

‘Overall, mortgage lenders and investors slightly expanded credit offerings in January on net, but this represented the combination of two divergent trends,’ says Mike Fratantoni, chief economist for the MBA. ‘First, the market continues to adapt to the new qualified mortgage (QM) regulation by eliminating products that do not fit inside of the QM box. This tightening is being offset, both in the market for higher balance loans, where lenders continue to loosen terms for jumbo loans, and in the refi market, where more lenders are offering streamline refinance programs.’

Fratantoni continued, ‘The Federal Reserve's Senior Loan Officer Survey showed that mortgage credit standards loosened somewhat among larger institutions, but tightened for smaller lenders. The data underlying the MCAI is predominantly from larger, wholesale lenders and investors.’


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