Credit Availability Rises for Jumbo, Low Credit Score Borrowers

The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) rose slightly in February. The Index, which measures any tightening or loosening of mortgage underwriting overall and by loan type, rose 0.6 percent to 180.1, indicating a relative easing of credit.  The index was benchmarked to 100 in March 2012.

The Conventional MCAI increased (1.1 percent), while the Government MCAI increased slightly (0.1 percent). Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.2 percent while the Conforming MCAI decreased by 0.2 percent.

"Credit availability increased in February as a result of new jumbo offerings brought to the market, both for agency jumbo and non-agency jumbo programs," said Mike Fratantoni, MBA Senior Vice President and Chief Economist. "We also saw some expansion in credit for borrowers with lower credit scores and higher LTVs, although credit availability for government programs remains tighter following the scaling back of VA refinance programs." 

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.) gathered from over 95 lenders and investors. They are combined with data from an AllRegs proprietary product to calculate a summary measure indicating the availability of mortgage credit at a point in time

The MCAI and its components are designed to show relative credit risk/availability for their respective indices and were benchmarked in March 2012. The total MCAI, Conforming, and Jumbo indices were indexed at 100 while the Conventional and Government indices were indexed at 73.5 and 183.5 respectively to better represent where each index might have been relative to 100.