NATNews Blog > February 2016 > ​Mortgage Credit Availability Decreased in January

    ​Mortgage Credit Availability Decreased in January

    2/9/2016 8:34:47 AM

    Mortgage credit availability decreased in January, according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from Ellie Mae's AllRegs Market Clarity business information tool.
     
    The MCAI decreased 0.4 percent to 123.8 in January.  A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.  The index was benchmarked to 100 in March 2012.
     
    Of the four component indices, the Conforming MCAI saw the greatest tightening (down 1.5 percent) over the month followed by the Government MCAI (down 0.8 percent). The Conventional MCAI was unchanged, while the Jumbo MCAI increased 0.2 percent over the month.
     
    “Credit availability decreased over the month, driven by a decline in some FHA and conventional offerings as compared to the previous month. These declines in the MCAI were only partially offset by loosening among adjustable rate mortgage (ARM) and jumbo lending programs," said Lynn Fisher, MBA's Vice President of Research and Economics.
     
    Conventional, Government, Conforming, and Jumbo Component Indices
    MBA now reports on five total measures of credit availability as part of the monthly MCAI release: the Total Mortgage Credit Availability Index, the Conventional Mortgage Credit Availability Index, the Government Mortgage Credit Availability Index, the Conforming Mortgage Credit Availability Index, and the Jumbo Mortgage Credit Availability Index, with historical data back to 2011.
     
    Of the four component indices, the Conforming MCAI saw the greatest tightening (down 1.5 percent) over the month followed by the Government MCAI (down 0.8 percent). The Conventional MCAI was unchanged, while the Jumbo MCAI increased 0.2 percent over the month.
     
    The Conventional, Government, Conforming, and Jumbo MCAIs are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index. The primary difference between the total MCAI and the Component Indices are the population of loan programs which they examine. The Government MCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examines non-government loan programs. Similarly, the Jumbo MCAI examines everything flagged as "Jumbo" while the Conforming MCAI examines loan programs that fall under conforming loan limits. The Conforming and Jumbo indices have the same "base levels" as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted "base levels" in March 2012. 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.