Higher Mortgage Credit Availability at the Beginning of Spring

The access to mortgage credit improved in March 2015, as reported by the Mortgage Bankers Association. The MBA’s Mortgage Credit Availability Index (MCAI) rose by 2.3% on a month-over-month basis to reach 121.4.

The MCAI reflects the changes in credit standards. An increase of the index indicates loosening of the credit standards while a decline indicates their tightening. The index is based on data from Ellie Mae. It was benchmarked to 100 in March 2012. Although the MCAI has had its ups and downs over the past three years, it has been following an upward trend.

The four indices which make up the MCAI also marked an increase in March. The access to conforming mortgage loans experienced the greatest improvement. The Conforming MCAI rose by 3%. It was followed by the Conventional MCAI which went up by 2.4%. The Government MCAI and the Jumbo MCAI experienced the same increase on a month-over-month basis. They rose by 1.8%.

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The Chief Economist of the MBA, Mike Fratantoni pointed out several factors which contributed to the increased availability of mortgage credit in March. The introduction of the 97 LTV program of Freddie Mac had a positive impact on the index. The parameters on jumbo loan programs loosened up further. The availability of cash-out refinance mortgage loans increased. The FHA streamline refinance continued to expand along with the VA Interest Rate Reduction Refinance Loan programs. These factors resulted in the increase of all four components of the MCAI.

Frantantoni predicted that even though mortgage credit remained tight by historical standards, the greater credit availability would bring about an increase in the home purchase activity in the spring of 2015. The factors that would contribute to the rise in purchase activity would be the low home loan rates and the strengthening of the job market, according to the Chief Economist of the MBA.



Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info

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