Mortgage Credit Availability Declines for Seventh Consecutive Month in September

According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data from the ICE Mortgage Technology, mortgage credit availability declined for the seventh consecutive month in September. The MCAI declined 5.4% to a reading of 102.5 in September.

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 4.9%, while the Government MCAI declined by 5.7%. Of the component indices of the Conventional MCAI, the Jumbo MCAI decreased by 5.8 %, while the Conforming MCAI fell by 3.6%.

Providing additional background and his analysis, MBA’s Associate Vice President of Economic and Industry Forecasting Joel Kan said:

“Credit availability fell to the lowest level since March 2013. With the likelihood of a weakening economy, which would lead to an increase in delinquencies, there was a smaller appetite for lower credit score and high LTV loan programs, along with a reduction in government streamline refinance programs. As mortgage rates have more than doubled over the past year, resulting in a drop in refinance activity, lenders have worked to reduce excess capacity and costs by eliminating underutilized loan programs. All the component indices declined last month, with most of the indices falling to their lowest level in over a year. In particular, the government credit availability index has declined in seven of the last eight months to its lowest level since April 2013.”