MBA's Mortgage Credit Availability Index in March up 0.4% month-over-month to 114; many mortgage lenders, investors are providing borrowers seeking higher loan amounts with more options by introducing new jumbo loan programs
April 9, 2014
– Mortgage credit availability increased slightly in March 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.
“Consistent with past months, many lenders and investors are providing borrowers seeking higher loan amounts with a broader range of financing options by introducing new jumbo loan programs. Over the month, some lenders made a complete exit from wholesale lending operations, while other lenders moved to enter that space or expanded operations,” said Mike Fratantoni, MBA’s Chief Economist.
The trend of increased availability for jumbo loan programs is consistent with behavior MBA has been monitoring in its Weekly Applications Survey which shows growth in purchase volume for applications with higher loan amounts and contraction in home purchase application volume for lower-balance loans. Similar trends have been noted in the National Association of Realtors’ existing home sales data as well. Lenders are likely moving to create a broader range of jumbo products in order to capture the increasing demand for such financing in the market.
The MCAI increased 0.44 percent from 113.5 in February to 114.0 in March. 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 the MCAI 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.
ABOUT THE MORTGAGE CREDIT AVAILABILITY INDEX
The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit.
The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 85 lenders/investors are combined by MBA using data made available via the AllRegs® Market Clarity® product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time. Base period and value for all indexes is March 31, 2012=100.
To learn more about the AllRegs Market Clarity platform visit
http://answers.allregs.com/MCAI-Market-Clarity. For more information on the Mortgage Credit Availability Index, including Methodology, Frequently Asked Questions and other helpful resources, please visit www.mba.org/MortgageCredit or contact MBAResearch@mba.org.
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site: www.mba.org.