Mortgage Credit Availability Boosted by Jumbos and 97LTV

Even though implementation of the Freddie Mac portion of thernnew 97 percent conventional loan program is still weeks away the programrnappears to be having an impact on credit availability.  The Mortgage Bankers Association (MBA) saidrntoday that its Mortgage Credit Availability Index (MCAI) ticked up in Februaryrnand that the new loans may be partially responsible.</p

The MCAI increased by 0.7 percent to 118.6 in February.  Increases in the index, which was benchmarkedrnto 100 in March 2012, indicate that lending standards are loosening.</p

“Credit availability improved marginally inrnFebruary, led by further increases in jumbo loan programs, and additionalrntake-up of Fannie Mae’s 97 LTV program,” said Mike Fratantoni, MBA’s ChiefrnEconomist.  “More than half of investors are now offering a 97 LTV program,rnand Freddie Mac announced that their program will be available inrnmid-March.  In terms of conforming credit, this was offset by somewhatrntighter constraints on cash-out loans and investors with multiple financedrnproperties.” </p

There are four components to the MCAI, thernConventional Mortgage Credit Availability Index, the Government Mortgage CreditrnAvailability Index, the Conforming Mortgage Credit Availability Index, and thernJumbo Mortgage Credit Availability Index, with historical data back to 2011.  The Jumbo component rose 1.4 percent inrnFebruary while the Conventional and Government MCAIs each were up 0.6rnpercent.  These were offset slightly byrnthe Conforming MCAI which declined from 113.6 to 113.4.</p

MBA constructs its credit accessibility indices fromrndata gathered through its Weekly Mortgage Applications Survey and data from thernAllRegs^® Market Clarity^® product. The GovernmentrnMCAI examines FHA/VA/USDA loan programs, while the Conventional MCAI examinesrnnon-government loan programs. Similarly, the Jumbo MCAI examines everythingrnflagged as “Jumbo” while the Conforming MCAI examines loan programs that fallrnunder conforming loan limits.

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