Jumbo Credit Access Benefits From Recent Drop in Rates

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Borrowers had a bit of an easier time getting a loan in March, especially those looking for Jumbo products.  The Mortgage Bankers Association’s (MBA’s)
Mortgage Credit Availability Index (MCAI) rose 1.1 percent from February to a
reading of 182.1.  A decline in the index
indicates that lending standards are tightening while an increase means a
loosening of credit.

The Total MCAI has component indices representing
various loan types.  The Conventional
MCAI increased 3.6 percent while the Government version was down 1.2 percent.  The two sub-indices within the Conventional
MCAI both moved higher.  The Jumbo index
increased 5.2 percent and the Conforming MCAI was up 1.4 percent. 

 

 

Joel Kan, MBA’s
Associate Vice President of Economic and Industry Forecasting explained, “Credit
availability increased in March, primarily due to a spike in jumbo mortgage
offerings. The jumbo sub-index increased 5 percent and reached its highest
level since last November, as the recent decline in mortgage rates led to a
jump in refinances
from borrowers with larger loans. The credit supply for
government loans decreased in March, as investors continue to reduce FHA and VA
streamline refi offerings.” 

MBA’s indices are
calculated using several borrower and property qualifying factors including
credit score, loan type, loan-to-value ratio, etc., collected from more than 95
lenders.  These are combined by MBA using
data from an AllRegs product to calculate the MCAIs, a summary measure that
indicates the availability of mortgage credit at a point in time. The total index
was benchmarked to100 on March 31, 2012 while the other indices were benchmarked
on the same date, the Conventional index at 73.5 and the government MCAI at 183.5.

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