Mortgage credit was slightly less available in
November than it was in October the Mortgage Bankers Association said
today. MBA's new Mortgage Credit
Availability Index (MCAI) slipped from 111.5 to 110.2, a -1.2 percent
change. Any decrease in the index
indicates that credit standards are tightening.
MBA said the index drop was occasioned by
discontinuance of a significant number of loan programs that had allowed for
loan-to-value ratios exceeding 95 percent and low-to-mid range credit score
minimums. There was also a continued
investor pull-back from programs offering longer than 30-year terms and
interest only loans. Some of these changes were the result of preparations for
new regulations coming into effect in January.
The above changes were offset a bit by an increase in cash-out
refinancing programs offered to well-qualified borrowers by some investors.
MBA unveiled the MCAI earlier this year in
conjunction with AllRegs and using their Market Clarity product. The index is benchmarked to 100 in March
2012. It takes into account several
factors related to borrower eligibility and the underwriting criteria from over
85 lenders and investors. By way of context, MBA says that had the
market been tracked by the index in 2007 it would have been at a level of
roughly 800 because of the easy availability of credit at that time.
The MCAI rose for four straight months after MBA
first went public with in late spring. It
has now retreated for a fourth consecutive month.