Jumbo/Conventional Mortgage Credit Leads November Improvement


access increased in November, again primarily because of new jumbo loan
products.  The Mortgage Bankers
Association (MBA) said its Mortgage Credit Availability (MCAI) Index rose 1.2
to 114.6.  A decline in the MCAI indicates that lending standards are
tightening, while increases in the index are indicative of a loosening of

“Credit availability increased in November, largely due to the addition
of jumbo loan programs
that permit cash-out refinancing,” said Mike Fratantoni,
MBA’s Chief Economist.  “Home price appreciation and larger equity
cushions have likely made some lenders more willing to allow certain borrowers
to take cash out, while still low mortgage rates may make this a more
attractive opportunity for some.”

MBA also measures the relative credit risk and available of
conventional mortgages and government backed by FHA, the VA, and USDA.  Both of these components of what MBA is now
calling the Total MCAI increased in November;  the Government component by less than one
percent, rising from 246.0 to 247.0.  The
Conventional MCAI increased 2.7 percent to 84.1.

The Total MCAI and its components are constructed using the same
methodology.  Factors related to borrower
eligibility along with underwriting criteria for over 85 lenders and investors
are combined using data from the AllRegs® Market Clarity® product and a
proprietary formula derived by MBA.  MBA
said the differences between the component indices and the total MCAI are
first, the population of programs they examine, and second, the “base levels”
to which they are calibrated.  Using data from the MCAI and the Weekly
Applications Survey, MBA calibrated the Conventional and Government indices to
better represent where each index might fall in March 2012 (the “base
period”).  The Total MCAI is benchmarked
at 100 for that date; the Convention MCAI at 69 and the Government component at

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