Mortgage credit availability increased in November according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from the AllRegs Market Clarity product.
The MCAI increased 1.2 percent to114.6 in November. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012.
“Credit availability increased in November, largely due to the addition of jumbo loan programs that permit cash-out refinancing,” MBA Chief Economist Mike Fratantoni said. “Home price appreciation and larger equity cushions have likely made some lenders more willing to allow certain borrowers to take cash out, while still low mortgage rates may make this a more attractive opportunity for some.”
Conventional and government component indices
MBA now reports on two additional measures of credit availability as part of the monthly MCAI release: The Conventional Mortgage Credit Availability Index and the Government Mortgage Credit Availability Index, with historical data back to 2011.
The Conventional and Government MCAIs, which are component indices of the Total MCAI, are constructed using the same methodology and are designed to show relative credit risk/availability for conventional and government (FHA/VA/USDA) loan programs. The differences between the component indices and the total MCAI are first, the population of programs they examine, and second, the “base levels” to which they are calibrated. Using data from the MCAI and the Weekly Applications Survey, MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the “base period”) relative to the Total=100 benchmark.
Both the Government MCAI and the Conventional MCAI increased in November. The Government MCAI increased less than 1 percent – going from 246.0 to 247.0 – while the Conventional MCAI increased 2.7 percent from 80.9 to 83.1.