WASHINGTON, D.C. – October 13, 2016 – (RealEstateRama) — Mortgage credit availability increased in September 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 increased 1.4 percent to 167.0 in September. 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 Government MCAI saw the greatest increase in availability over the month (up 1.9 percent), followed by the Conventional MCAI (up 0.7 percent), the Conforming MCAI (up 0.7 percent), and the Jumbo MCAI (up 0.6 percent). “The increase in credit availability in September was driven by more investors offering streamlined refinance programs to borrowers with USDA and FHA loans.” said Lynn Fisher, MBA’s Vice President of Research and Economics. “Streamline programs allow borrowers who have been consistently making their mortgage payments and meet other eligibility requirements, to refinance their existing mortgage into a lower interest rate with reduced documentation requirements. While these programs accounted for most of the increase, we also observed investors continuing their rollout of the new Fannie Mae and Freddie Mac low down payment (97 LTV) loan programs, and some increased availability of jumbo loans.”
CONVENTIONAL, GOVERNMENT, CONFORMING, AND JUMBO MCAI COMPONENT INDICES
Of the four component indices, the Government MCAI saw the greatest increase in availability over the month (up 1.9 percent), followed by the Conventional MCAI (up 0.7 percent), the Conforming MCAI (up 0.7 percent), and the Jumbo MCAI (up 0.6 percent).
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. The Jumbo and Conforming MCAIs are a subset of the conventional MCAI and do not include FHA, VA, or USDA loan offerings. The Jumbo MCAI examines conventional programs outside conforming loan limits while the Conforming MCAI examines conventional 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. 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.
EXPANDED HISTORICAL SERIES
The Total MCAI has an expanded historical series which gives perspective on credit availability going back approximately 10-years (expanded historical series does not include Conventional, Government, Conforming, or Jumbo MCAI). The expanded historical series covers 2004 through 2010, and was created to provide historical context to the current series by showing how credit availability has changed over the last 10 years – this includes the housing crisis and ensuing recession. Data prior to March 31, 2011, was generated using less frequent and less complete data measured at 6-month intervals and interpolated in the months between for charting purposes. Methodology on the expanded historical series from 2004 to 2010 has not been updated.
ABOUT THE MORTGAGE CREDIT AVAILABILITY INDEX
The MCAI provides the only standardized quantitative index that is solely focused on mortgage credit. The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via the AllRegs® Market Clarity® product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time. Base period and values for total index is March 31, 2012=100; Conventional March 31, 2012=73.5; Government March 31, 2012=183.5.
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ABOUT THE MORTGAGE BANKERS ASSOCIATION:
The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, REITs, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site: www.mba.org.
MBA Press and Media (Index/Methodology/Economic Insight): For more information contact: Ali Ahmad, MBA (202) 557-2727 or
ABOUT ELLIE MAE:
Ellie Mae (NYSE:ELLI) is a leading provider of innovative on-demand software solutions and services for the residential mortgage industry. Ellie Mae’s AllRegs solutions are used by virtually all of the top 100 lenders as well as throughout numerous governmental agencies, including Fannie Mae, Freddie Mac, the FHLBs, FHA, VA, RHS, Ginnie Mae, and more. AllRegs is the exclusive electronic publisher of the Fannie Mae and Freddie Mac Single and Multi-Family Seller/Servicer Guides and The Federal Home Loan Banks’ MPF Program Guidelines. Ellie Mae’s AllRegs solutions include single and multifamily underwriting & insuring guidelines as well as federal compliance laws and regulations, state compliance laws and regulations with plain-language analyses, contract publishing services, policy manuals and a library of historical guidelines. The educational division, AllRegs Academy, offers virtual and live training, as well as designation and practical guides. The Professional Services Group develops custom guides, policy manuals and other documents on a contract basis. For more information, call (800) 848-4904 or go to www.EllieMae.com.
AllRegs by Ellie Mae Press and Media: For more information contact: Erica Harvill, Ellie Mae or AllRegs by Ellie Mae Sales Inquiries:
For more information, contact your Regional Account Executive (800) 848-4904 or
Rob Van Raaphorst
(202) 557- 2799