Mortgage Credit Tightened in December

Mortgage credit availability decreased 1.8% in December compared with November to a score of 179.2 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

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

Credit availability for conventional mortgages decreased 0.7% compared with November, while credit availability for government loans decreased 2.6%. Credit availability for conforming loans fell 0.1%, while credit availability for jumbo loans decreased 1.4%.

“In December, a handful of investors made end-of-the-year adjustments to their menu of offerings,” says Lynn Fisher, vice president of research and economics for the MBA, in a statement. “This resulted in a net decrease in credit availability for government-backed programs (FHA/VA/USDA), and especially for lower-credit-score [and] higher-loan-to-value loans, as well as streamline [requiring less documentation] refinances.

“Despite the decline in the jumbo credit availability over the month, the jumbo index was up nearly 20 percent from December a year ago – by far the largest gain among the component indices,” Fisher adds.

The report analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool.

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