Jumbo Credit Access Surged in October

The ease of access to mortgage credit rose
in October according to the Mortgage Credit Availability Index.  An increase in the Index, a product of the
Mortgage Bankers Association (MBA), indicates that credit standards are loosening
while a decline is a sign that standards are tightening.

 

 

The 2.5 percent change in October took the
composite index to 186.7. Among its components the Conventional MCAI, which
itself is composed of two indices, gained 5.5 percent. One of its sub-measures,
the Jumbo MCAI, surged by 6.3 percent while the other, the Conforming MCAI was
4.6 percent higher. Moderating the overall gains, the Government MCAI ticked
down 0.4 percent.

“Credit availability
increased in October, driven largely by an expansion in the supply of
conventional credit
, while government credit fell slightly over the month,”
said Joel Kan, MBA’s associate vice president of economic and industry
forecasting. “Reversing a trend from last month, lenders made more conventional
and low down payment programs available to prospective borrowers. This increase
in supply was likely in response to a growing number of first-time home buyers
in the market, as home price appreciation has slowed and wage growth has picked
up. Jumbo credit availability also expanded last month, with the jumbo index
increasing again to its highest level since the survey began.”

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 95
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.  The
index was benchmarked to 100 in March 2012. 
The Conforming and Jumbo indices have the same “base levels” as the
Total MCAI (March 2012=100), while the Conventional and Government indices have
adjusted “base levels” in March 2012. MBA calibrated the Conventional and
Government indices to better represent where each index might fall in March
2012 (the “base period”) relative to the Total=100 benchmark.

Article source: http://www.mortgagenewsdaily.com/11062018_mba_mcai.asp

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