The Mortgage Bankers Association (MBA) released a comprehensive report indicating a slight decrease in mortgage credit availability in September, indicating tightening lending standards. MBA’s Mortgage Credit Availability Index (MCAI) reflected the drop based on an analysis of data provided by ICE Mortgage Technology.
The MCAI fell by 0.5 percent to 98.5 during the month. The index was benchmarked to 100 in March 2012 and consists of multiple separate indices corresponding to various loan types – the conventional, government, conforming, and jumbo MCAIs.
“Mortgage credit availability tightened slightly in September as lenders remained cautious in this uncertain economic environment,” MBA Vice President and Deputy Chief Economist Joel Kan said in the release. “There was a decline in loan programs for cash-out refinances, jumbo and non-QM (qualified mortgage) loans, including loans that require less than full documentation. Most component indexes decreased over the month, but the government index increased, driven by more offerings of VA streamline refinances.”
The conventional MCAI decreased 1.7 percent in September, while the government MCAI increased by 0.8 percent. The component indices of the conventional MCAI and the jumbo MCAI decreased by 2.6 percent, and the conforming MCAI remained unchanged.
The other MCAIs are built on the same methodology as the total MCAI and are designed to show relative credit risk/availability for their respective index. The main difference between the total MCAI and the component indices pertains to the loan programs which they examine.
The government MCAI examined FHA/VA/USDA loan programs, while the conventional MCAI examined 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 examined conventional programs outside conforming loan limits, while the conforming MCAI examined conventional loan programs that fall under conforming loan limits.
An expanded historical series of the MCAI was created to offer perspective on how credit availability has changed over the last 10 years – including the housing crisis and ensuing recession. Data prior to March 31, 2011, was generated using less frequent and less complete data measured at six-month intervals and interpolated in the months between for charting purposes. Methodology on the expanded historical series from 2004 to 2010 has not been updated.