Mortgage Credit Availability Increases in January
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Higher Index=More Credit Available
Lower Index=Less Credit Available
Mortgage credit availability increased in January according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from the AllRegs® Market Clarity® product.
"Overall, mortgage lenders and investors slightly expanded credit offerings in January on net, but this represented the combination of two divergent trends," said Mike Fratantoni, Chief Economist at MBA. "First, the market continues to adapt to the new QM regulation by eliminating products that do not fit inside of the QM box. This tightening is being offset, both in the market for higher balance loans, where lenders continue to loosen terms for jumbo loans, and in the refi market, where more lenders are offering streamline refinance programs."
Fratantoni continued, "The Federal Reserve's Senior Loan Officer Survey showed that mortgage credit standards loosened somewhat among larger institutions, but tightened for smaller lenders. The data underlying the MCAI are predominantly from larger, wholesale lenders and investors."
The MCAI increased 1.85 percent from 110.9 in December to 113.0 in January. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012. If it had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available at that time.
MBA has partnered with AllRegs® to produce monthly MCAI, which feeds current mortgage underwriting parameters into a single index number to capture whether overall mortgage credit is more or less available from month to month.
The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit.
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