The Mortgage Bankers Association’s (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data from Ellie Mae’s AllRegs® Market Clarity® business information tool, is reporting that mortgage credit availability decreased in August, to the tightest level in more than six years. This as a weak economy prompted lenders to tighten standards. The group’s Mortgage Credit Availability Index fell 4.7% to 120.9 last month, the lowest since March 2014, an indication of stricter requirements to get loans. The index plunged from record highs seen in late 2019, after the COVID-19 pandemic caused the worst economic contraction since the Great Depression. In a prepared statement, Joel Kan, an MBA associate vice president, said the drop in the availability of credit was “driven by a reduction in supply from both conventional and government segments of the market.” Kan went onto say that. “Credit continues to tighten because of uncertainty still looming around the health of the job market. A further reduction in loan programs with low credit scores, high LTVs, and reduced documentation requirements also continued to drive the overall decline in credit availability.”
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