Mortgage Credit Tightened Slightly in July


Mortgage credit availability decreased in July compared with June, falling 0.4% to a score of 189.0 on the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI).

Credit for conventional loans increased 0.1% while credit for government loans fell by 1.0%.

Of the component indices of the conventional index, credit for jumbo loans increased by 0.7% and credit for conforming loans fell by 0.8%.

“Credit availability in July decreased overall, driven by declines in the conforming and government indices,” says Joel Kan, associate vice president of economic and industry forecasting for the MBA, in a statement. “Conditions tightened some for borrowers with high loan-to-value ratios and lower credit scores. One outlier was the jumbo index, which increased to its highest level since the inception of this survey in 2012.”

Kan adds that the “decline in the government index resulted from a pullback by investors in government high-balance and streamlined refinance products.”  

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.

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

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