Mortgage credit availability declines in December

by Francis Monfort11 Jan 2018
Credit standards tightened slightly in December from November, according to a report from the Mortgage Bankers Association (MBA).

The Mortgage Credit Availability Index (MCAI) fell 1.8% to 179.2 during the month. The index analyzes data from Ellie Mae’s AllRegs Market Clarity tool. An increase in the index would indicate loosening lending standards.

“In December, a handful of investors made end-of-the-year adjustments to their menu of offerings. This resulted in a net decrease in credit availability for government-backed programs (FHA/VA/USDA), and especially for lower credit score, higher loan-to-value loans, as well as streamline (requiring less documentation) refinances,” said Lynn Fisher, MBA’s vice president of research and economics. “Despite the decline in the jumbo credit availability over the month, the jumbo index was up nearly 20% from December a year ago, by far the largest gain among the component indices,”

The government MCAI recorded the biggest decline in availability among the four component indices with a 2.6% decline over the month. The jumbo MCAI followed with a 1.4% decrease. The conventional MCAI and conforming MCAI decreased during the month by 0.7% and 0.1%, respectively.

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