Mortgage Credit Availability Increases in August

According to the Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI) report, which analyzes data from ICE Mortgage Technology, mortgage credit availability increased in August.

The MCAI increased 0.3% to a reading of 96.6 in August. 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 increased 0.6%, while the Government MCAI was unchanged. Of the component indices the Conventional MCAI, the Jumbo MCAI rose 2.7%, while the Conforming MCAI declined by 2.7%.

Providing additional background and his analysis to the MCAI for August, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Credit availability in August increased slightly but remained close to the very low levels last seen in January 2013. 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.”