Mortgage credit availability decreased in December, according to the Mortgage Credit Availability Index (MCAI) from the Mortgage Bankers Association (MBA). The MCAI decreased 2.4 percent to 124.3 in December, a sign that lending standards are tightening.
Of the four component indices, the Conventional MCAI saw the greatest tightening (down 4.8 percent) over the month, followed by the Jumbo MCAI (down 4.2 percent), and the Government MCAI (down 0.6 percent). The Conforming MCAI increased 0.1 percent over the month.
“Credit availability declined in December 2015. A large part of the decline was driven by a technical issue related to implementation of affordable, low downpayment, loan programs,” MBA Vice President of Research and Economics Lynn Fisher said in a press release. “Many investors discontinued existing low downpayment loan programs only to replace them with new iterations of similar programs that were discontinued.”
Fisher said underwriting changes causing these issues were representative of an expansion of the credit targeting low-to-moderate income borrowers and first-time homebuyers.
“A similar issue also caused changes to jumbo loan programs and had a tightening effect on the index, while changes to government lending programs (FHA and VA) had an upward/loosening impact,” Fisher said.