The availability of jumbo mortgage loans increased in July, but not enough to offset tightening in credit access for other types of loans.  The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) dipped 0.4 percent compared to June to a reading of 189.0.  A decline in the MCAI, which was benchmarked to 100 in March 2012, indicates that lending standards are tightening, while increases in the index are indicative of loosening credit.

Two major component indices and two sub-indices make up the MCAI. The Government Index declined 1.0 percent month over month and the Conventional Index eked out a 0.1 percent gain. That index is composed of the Jumbo Index which jumped by 0.7 percent and the Conforming Index which fell 0.8 percent.

"Credit availability in July decreased overall, driven by declines in the conforming and government indices. Conditions tightened some for borrowers with high loan-to-value ratios and lower credit scores," said Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting. "One outlier was the jumbo index, which increased to its highest level since the inception of this survey in 2012."

Added Kan, "The decline in the government index resulted from a pullback by investors in government high-balance and streamlined refinance products."  

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.) gathered from over 95 lenders and investors. They are combined with data from Ellie Mae's AllRegs proprietary product to calculate a summary measure indicating the availability of mortgage credit at a point in time

Like the MCAI, its components were benchmarked in March 2012 and are designed to show relative credit risk/availability for their respective indices. The Conforming, and Jumbo sub-indices were indexed at 100 while the Conventional and Government indices were indexed at 73.5 and 183.5 respectively to better represent where each index might have been relative to 100.