Mortgage Credit Availability Up for Fifth Month

Increased availability and flexibility in jumbo lending was the principal reason for an increase in the Mortgage Bankers Association's (MBA's) Mortgage Credit Availability Index (MCAI) in January.  An increase in the index indicates a loosening of lending standards.

The MCAI increased by 1.1 percent in January to 177.1.  Among the four components that make up the index, the Jumbo MCAI saw the greatest increase, rising by 4.7 percent.  The Conventional MCAI was up by 2.3 percent and the Government component increased 0.2 percent.  The index measuring the availability of conforming loans declined by 0.1 percent.

Lynn Fish, MBA's Vice President of Research and Economics said, "Mortgage credit availability increased for the fifth consecutive month in January, driven by increased availability of jumbo loan programs.  We saw a particular increase in agency jumbo programs that focus on loans in high cost areas that exceed the baseline conforming loan limit of $424,000 but which are still eligible for purchase by the GSEs.  While the change in GSE loan limits may have had an indirect impact on the jumbo MCAI, there were other factors at play as several investors rolled out new jumbo loan programs in January."

The MCAI and its components are calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.).  These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA and analyzed using data made available via Ellie Mae's loan application data base.  The MCAI, Conforming, and Jumbo indices have a base level of March 2012=100. The Conventional and Government indices have adjusted "base levels" in March 2012, calibrated to better represent where each index might fall in March 2012 (the "base period") relative to the Total=100 benchmark.