Accessibility to mortgage credit rose in December. The Mortgage Bankers Association said today that its Mortgage Credit Availability Index (MCAI) went from the November level of 114.6 to 115.7, a 1 percent gain. An increase in the index, which was indexed to 100 in March 2012, indicates a loosening of credit.
Although MBA said the conventional component of the MCAI increased by 2.2 percent in December, indicating great availability of government sponsored enterprise (GSE) loans, while the Government MCAI was up only 1 percent. This may not reflect to any degree the new 97 percent loans announced last month by Fannie Mae and Freddie Mac. Fannie Mae's new loan, available to well qualified first-time homebuyers, went into effect immediately but Freddie Mac's version will not be available until March.
Mike Fratantoni, MBA's Chief Economist said that, "Since only one of the two GSEs has gone live with their updates and the resulting investor pickup can be a delayed process, the impact of this announcement may take some time to fully quantify. Furthermore, Fannie Mae had been offering 97 LTV options until late October 2013 so this is really a reintroduction, not a new trend. In addition to these new high-LTV programs, investors continued to expand their product offerings for jumbo loans." Fratantoni said that about one quarter of the investors included in the MCAI data have started offering the low downpayment loans.
The Total MCAI and its components are constructed using factors related to borrower eligibility along with underwriting criteria for over 85 lenders and investors. These are combined using data from the AllRegs® Market Clarity® product and a proprietary formula derived by MBA.