The Mortgage Bankers Association (MBA) said on Tuesday that an anomaly was likely responsible for the slight downward shift in mortgage credit available in October.  MBA's Mortgage Credit Availably Index (MCAI) dipped 2.5 percent compared to September.  The October index reading is 113.2.  A decline in the MCAI means that lending standards are tightening.

Mike Fratantoni, MBA's Chief Economist explained that the major cause of the decline was the removal of special loan programs that applied only to sales of bank-owned real estate (REOs).  "These programs were likely discontinued due to the shrinking level of REO properties for sale on the market," he said. 

He further explained that, "FHFA recently announced plans regarding efforts to expand access to conventional conforming credit through greater clarity with respect to repurchase risk and a modest expansion of higher LTV lending. These changes are not yet finalized and hence are clearly not reflected in the October data."

MBA uses information from a survey of its members coupled with data from the AllRegs® Market Clarity Product®.  The Index was benchmarked to 100 in March 2012.