Borrowers Give Thanks For Looser Mortgage Credit In November
A report by the Mortgage Bankers Association says the group’s Mortgage Credit Availability Index rose 2.1 percent to 188.9 last month, indicating a loosening of credit standards. That puts credit availability near record-high numbers achieved this past spring.
"Credit availability rose for the third straight month in November, with an increase in supply across all loan types," said Joel Kan, MBA's associate vice president of economic and industry forecasting. "Most notably, the jumbo index climbed to yet another record high, as investors increased their willingness to purchase loans with lower credit scores and higher LTV ratios. Additionally, the government index saw its first increase in nine months, driven by streamline refinance programs.
Added Kan in the statement, "Expanding credit availability will continue to support active levels in mortgage lending, even as refinance activity starts to level off."
A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012. The Conventional MCAI increased 1.4 percent, while the Government MCAI increased by 2.9 percent. Of the component indices of the Conventional MCAI, the Jumbo MCAI increased by 2.2 percent, and the Conforming MCAI rose by 0.2 percent.
Click on the image above to learn more about November credit availability.