Investors slightly expanded their loan offerings
and switched to longer-term products in response to new mortgage regulations
the Mortgage Bankers Association (MBA) said today. As a result, credit availability expanded slightly
MBA's Mortgage Credit Availability Index (MCAI)
increased 0.44 percent from 113.0 in January to 113.5 in February. This follows an increase of 1.85 percent in
January as the Consumer Financial Protection Agency's (CFPB) Qualified Mortgage
(QM) and Ability to Repay (ATR) regulations went into effect. A decline in the
MCAI indicates that lending standards are tightening, while increases in the Index
are indicative of a loosening of credit.
MBA's Chief Economist
Mike Fratantoni said this was the third straight month that credit offerings
had expanded slightly because of offsetting factors. "Specifically, the recently implemented
QM/ATR sections of the new CFPB regulations stipulate that ARM loans must
qualify at the highest allowable rate for the first five years of the
loan. As a result, many investors have discontinued loans whose interest
rate adjusts after only 3 year (also known as 3/1 ARMS). While there was
significant pull-back on these 3/1 programs, lenders and investors added
several new 5+ year ARM programs, including those for Jumbo loans, to their
repertoire resulting in a net increase to the MCAI."
The MCAI was benchmarked to 100 in March
2012. MBA said that had the MCAI had been tracked in 2007, it would have
been at a level of roughly 800, indicating the credit was much more available
at that time. MBA produces the index
using data from the AllRegs® Market Clarity® product.