Mortgage lenders saw an uptick
in credit availability in August, according to the Mortgage Credit Availability
Index (MCAI), a report in which the Mortgage Bankers Association (MBA) provides
analysis of data compiled using ICE Mortgage Technology.
Per the MCAI, mortgage credit
availability inched up by 0.3 percent to 96.6 (out of 100) in August,
indicating a slight loosening of lending standards, whereas a decline in MCAI
would indicate that lending standards are tightening. The index has been
benchmarked at 100 since March 2012.
The Conventional MCAI increased
0.6 percent, with a 2.7 percent increase in the Jumbo MCAI and a 2.7 percent
dip in the Conforming MCAI. The Government MCAI saw no change.
“Credit availability in August
increased slightly but remained close to the very low levels last seen in
January 2013,” MBA’s Vice President and Deputy Chief Economist Joel Kan said in
a statement. “The overall increase was driven by an increased number of loan
programs that included parameters such as cash-out refinances and
mid-range credit scores. The conforming index dropped to its lowest level since
2011, while the jumbo index increased after three monthly declines.
“Industry capacity continues to
decline as lenders reduce staffing and simplify their product offerings to
reduce costs and raise profitability. While this dynamic has led to lower
credit availability, it has also provided some lenders with new opportunities
to expand some of their product offerings, and we saw some of that growth in
the jumbo space last month,” Kan added.
The Total MCAI is constructed
using the same methodology as the Conventional, Government, Conforming and
Jumbo MCAIs. Each is designed to show relative credit risk/availability for
their respective index, MBA noted in a release. The main difference between the
total MCAI and the Component Indices is the population of loan programs which
they examine.
The Government MCAI examines
FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government
loan programs. The Jumbo and Conforming MCAIs are a subset of the conventional
MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI
examines conventional programs outside conforming loan limits. The Conforming
MCAI indicates conventional loan programs under conforming loan limits.