A big jump in jumbo loan lending drove an increase
in mortgage credit availability in April.
The Mortgage Bankers Association’s Mortgage Credit Availability Index
(MCAI) rose 2.1 percent in April to 186.1.
An increase in the index indicates that lending standards are loosening.
The Conventional MCAI increased 4.3
percent largely because of a 6.8 percent surge in its Jumbo Index
component. The second Conventional component,
the Conforming MCAI, was up a more modest 1.2 percent. The Government MCAI was unchanged.
Joel Kan, MBA’s Associate Vice President of
Economic and Industry Forecasting said, “Credit supply increased 2 percent in
April and was driven by a 7 percent gain in the jumbo index, which reached its
highest level since the beginning of the MCAI in 2011. Additionally, investors continued a trend
from March of further increasing their willingness to purchase more non-QM and
non-agency jumbo loans. The high-end of the purchase market had shown weakness
earlier this year, before the recent decline in mortgage rates, and it appears
investors are trying to remain competitive in that segment of the
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.