Despite new Regs Credit Eased in January

There are competing forces at work inrnthe mortgage market the Mortgage Bankers Association (MBA said today.  First, lenders are still adjusting to the newrnQualified Mortgage (QM) rules that went into effect last month.  This is leading them to eliminate somernmortgage products.  At the same timernthere is some loosening in private market credit avenues.  The second factor appears to have more thanrncompensated for the first and MBA’s Mortgage Credit Availability Index (MCAI)rnwent up 1.85 percent in January, rising from 110.9 in December to 113.0. </p

Mike Fratantoni, Chief Economist at MBA said, “Thernmarket continues to adapt to the new QM regulation by eliminating products thatrndo not fit inside of the QM box.  This tightening is being offset, both inrnthe market for higher balance loans, where lenders continue to loosen terms forrnjumbo loans, and in the refi market, where more lenders are offering streamlinernrefinance programs.”<br /<br /Fratantoni continued, "The Federal Reserve's Senior Loan Officer Survey showedrnthat mortgage credit standards loosened somewhat among larger institutions, butrntightened for smaller lenders.  The data underlying the MCAI isrnpredominantly from larger, wholesale lenders and investors.” </p

A decline in the MCAI indicates that lendingrnstandards are tightening, while increases in the index are indicative of arnloosening of credit.  The index was benchmarked to 100 in Marchrn2012.  By way of context, MBA said if its index had existed in 2007 itrnwould have been at a level of roughly 800, indicating the credit was much morernavailable at that time.

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