Real estate in depth | 23 Aug 2021
SOURCE: ASSOCIATION OF MORTGAGE BANKERS; POWERED BY ELLIE MAE’S ALLREGS MARKET CLARITY
WASHINGTON — Mortgage credit availability increased in July according to the Mortgage Credit Availability Index (MCAI), a report by the Mortgage Bankers Association (MBA) that analyzes data from Ellie Mae’s AllRegs Market Clarity business intelligence tool .
The MBA report released on August 12 said the MCAI rose 0.3% to 119.1 in July. A drop in the MCAI indicates that lending standards are tightening, while increases in the index point to sagging credit. The index was benchmarked at 100 in March 2012. The conventional MCAI rose 0.8%, while the government MCAI remained unchanged. Among the indices comprising the conventional MCAI, the Jumbo MCAI increased by 3.8% and the Conforming MCAI decreased by 3.2%.
Credit availability edged up in July, driven by an increase in jumbo loan programs. The overall gain occurred despite another month of decline in high LTV refinancing programs due to GSE policy changes, ”said Joel Kan, associate vice president of economic and industrial forecasting at the MBA. “The elimination of more high LTV refinance loans caused most of the 3% drop in the compliance index, but this was somewhat offset by the addition of new loan programs. refinancing loans to help qualified and low-income GSE borrowers. The rebound in the availability of jumbo credit followed a sharp decline in June, as some investors renewed their interest in ARM jumbo loans for cash refinances and investment houses. ”
Kan added, “Even though the economic recovery is underway, the aggregate supply of credit has remained close to its lowest levels since 2014. Some borrowers are still on forbearance due to the pandemic, and services continue. to work on possible resolutions for these borrowers. ”
The MCAI is calculated using several factors related to the borrower’s eligibility (credit score, type of loan, loan-to-value ratio, etc.). These underwriting metrics and criteria for over 95 lenders / investors are combined by MBA using data made available through the AllRegs Market Clarity product and a proprietary formula derived from MBA to calculate MCAI, a summary metric that indicates the availability of mortgage credit at a given time. on time.