Mortgage credit availability decreased in September, falling 0.5% to a score of 98.5 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).
A decrease in the index score 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 loans decreased 1.7% while credit availability for government loans increased by 0.8%.
Credit availability for jumbo loans decreased by 2.6% – while credit for conforming loans was flat compared with the previous month.
“Mortgage credit availability tightened slightly in September as lenders remained cautious in this uncertain economic environment,” says Joel Kan, vice president and deputy chief economist for the MBA, in a statement. “There was a decline in loan programs for cash-out refinances, jumbo and non-QM loans, including loans that require less than full documentation. Most component indexes decreased over the month, but the government index increased, driven by more offerings of VA streamline refinances.”
The MCAI is calculated using several factors related to borrower eligibility including credit score, loan type, loan-to-value ratio, etc.
These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via ICE Mortgage Technology and a proprietary formula derived by MBA to calculate the MCAI.
Last month, the MBA reported that mortgage credit availability had increased 0.9% in August compared with July.