There are competing forces at work in
the mortgage market the Mortgage Bankers Association (MBA said today. First, lenders are still adjusting to the new
Qualified Mortgage (QM) rules that went into effect last month. This is leading them to eliminate some
mortgage products. At the same time
there is some loosening in private market credit avenues. The second factor appears to have more than
compensated for the first and MBA's Mortgage Credit Availability Index (MCAI)
went up 1.85 percent in January, rising from 110.9 in December to 113.0.
Mike Fratantoni, Chief Economist at MBA said, "The
market continues to adapt to the new QM regulation by eliminating products that
do not fit inside of the QM box. This tightening is being offset, both in
the market for higher balance loans, where lenders continue to loosen terms for
jumbo loans, and in the refi market, where more lenders are offering streamline
Fratantoni continued, "The Federal Reserve's Senior Loan Officer Survey showed
that mortgage credit standards loosened somewhat among larger institutions, but
tightened for smaller lenders. The data underlying the MCAI is
predominantly from larger, wholesale lenders and investors."
A decline in the MCAI indicates that lending
standards are tightening, while increases in the index are indicative of a
loosening of credit. The index was benchmarked to 100 in March
2012. By way of context, MBA said if its index had existed in 2007 it
would have been at a level of roughly 800, indicating the credit was much more
available at that time.