Mortgage Credit Jumped in January as Lenders Adjusted to End of HARP

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Mortgage credit availability increased 2.3% in January compared with December to reach a score of 179.0 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index.

Helping to drive the increase was the sunsetting of HARP on Jan. 1. In response, some mortgage lenders have launched new relief programs aimed at assisting the few remaining struggling borrowers who might have otherwise qualified for the federal program.

Credit availability for conventional loans increased 4.9% while credit availability for government loans was unchanged.

Within the conventional realm, credit availability for conforming loans increased by 7.3% and credit availability for jumbo loans increased by 3.0%, according to the report, which utilizes data from Ellie Mae’s AllRegs Market Clarity business information tool.

“There was an increase in the supply of mortgage credit in January, which was a reversal from the December pullback that was caused by the end of the Home Affordable Refinance Program (HARP) and a reduction in jumbo offerings,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement.

“Last month, investors and lenders added more programs to cater to lower credit score borrowers, in addition to new relief refinance programs,” he adds. “These relief refinance programs are not a direct replacement for HARP, but do serve a similar purpose to assist borrowers who may have run into financial challenges.”

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