MBA: Mortgage Credit Increased Slightly In November

Mortgage credit availability increased slightly in November compared to October, according to the Mortgage Bankers Association's (MBA) Mortgage Credit Availability Index (MCAI).

The MCAI increased to a score of 114.6 in November, an increase of 1.2% compared to October.

A decline in the index score indicates that lending standards are tightening, while an increase is indicative of a loosening of credit. The index was benchmarked to 100 in March 2012.

Mike Fratantoni, chief economist for the MBA, says the increase was due mainly to the addition of jumbo loan programs that permit cash-out refinancing.

‘Home price appreciation and larger equity cushions have likely made some lenders more willing to allow certain borrowers to take cash out, while still-low mortgage rates may make this a more attractive opportunity for some,’ Fratantoni says in a release.

The MCAI includes the Conventional Mortgage Credit Availability Index and the Government Mortgage Credit Availability Index, with historical data back to 2011. Both of those component indexes rose in November, with the Government MCAI increasing less than 1%, from an index score of 246.0 to 247.0, and the Conventional MCAI increasing 2.7%, from 80.9 to 83.1.

The MBA notes that these two indexes are calculated the same way as the total MCAI; however, there are key differences between the population of programs they examine and the ‘base levels’ to which they are calibrated. Using data from the MCAI and the MBA's Weekly Applications Survey, the indices have been calibrated to better represent where each might fall in March 2012 (the base period) relative to the Total=100 benchmark.

The MCAI is calculated using data made available via the AllRegs Market Clarity product and a proprietary formula derived by the MBA.


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