US Mortgage Credit Availability Index Rises in February

On Tuesday, the Mortgage Bankers Association (MBA) reported that mortgage credit availability rose in February, according to its Mortgage Credit Availability Index (MCAI).

The MCAI rose 1.1% to a reading of 107.1. A decline in the MCAI indicates tighter lending standards, while increases indicate looser credit. The index was benchmarked to 100 in March 2012.

The Conventional MCAI rose 2.7%, while the Government MCAI fell 0.8%. Within the Conventional MCAI, the Jumbo MCAI increased 2.9%, and the Conforming MCAI increased 2.0%.

Commenting on the report, MBA Vice President and Deputy Chief Economist Joel Kan said:

“Lenders increased mortgage credit supply last month, particularly for refinancing, as mortgage rates moved lower in January and February. Most of last month’s supply growth was in loan programs that allowed for cash-out refinance and on investor homes, although these were still limited to lower LTV borrowers. The jumbo index increased by 3% for the second straight month, again driven by growth in non-QM loan programs. The government index was the only component that saw a decline in credit supply over the month, as lenders likely tightened underwriting standards given the recent increase in FHA mortgage delinquency rates.”