Mortgage Credit Availability Continues to Tighten in November

On Tuesday, the Mortgage Bankers Association (MBA) released its Mortgage Credit Availability Index (MCAI) report for November. According to the MCAI, which analyzes data from the ICE Mortgage Technology, mortgage credit availability declined in November.

The MCAI declined 3.3% to a reading of 95.9 in November. The MBA notes that a decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI decreased 2.7%, while the Government MCAI decreased by 3.9%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 0.9%, and the Conforming MCAI declined by 6.6%.

In background and analysis accompanying the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Credit availability tightened considerably in November, pushing the index to the lowest level in five months. Part of the decline was attributable to investors pulling back on high LTV and low credit score programs for both fixed and ARM loans, as well as further exits from the broker channel in an originations market that is still challenging for many lenders. The most notable impact was on the government index, which decreased to its lowest since December 2012.”