Lenders Tightening Credit Access; Index Down for Second Month

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Mortgage credit access tightened for the
second straight month
in March.  The
Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index
(MCAI) declined 1.5 percent to 177.9 compared to February and has lost 5.0
points since January. The Index was benchmarked at 100 in March 2012.

 

 

All four of the
component indices were down, with the Government MCAI taking the biggest hit,
down 2.1 percent.  The Conventional MCAI was
down 0.8 percent as was one of its sub-indices, the Conforming index. The
second component of the Conventional MCAI, the Jumbo index, was down 0.7
percent.

Joel Kan, MBA’s
Association Vice President of Research and Economics said, “Mortgage credit
availability decreased in March driven by both conventional and government loan
programs. The government MCAI saw the largest decrease which was driven by
investors making adjustments to their interest rate reduction offerings for FHA
and VA loans.”

The MCAI is calculated
using several underwriting factors including credit score, loan type, and
loan-to-value ratio. The four components are constructed in the same way as the
composite index and are designed to show relative risk and credit availability
for their respective borrower populations. The Conforming and Jumbo indices
have the same index date and base as the MCAI, March 2012=100.  The Conventional and Government indices have
adjusted “base levels” to better represent where each index might fall in March
2012 relative to the 100 benchmark.



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