Mortgage credit availability experienced July rise

The Mortgage Credit Availability Index (MCAI) revealed mortgage credit availability experienced a slight rise in July.

The Mortgage Bankers Association (MBA) reports, which analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool, determined the MCAI increased by 0.3 percent to 179.0.

“Mortgage credit availability increased slightly in July, driven by increased availability of conventional programs,” Lynn Fisher, MBA’s vice president of Research and Economics, said. “Many agency eligible loan programs have been updated so that underwriting parameters for adjustable rate mortgages (ARMs) more closely align with their existing fixed rate counterparts. In many cases this means higher loan to value (LTV) ratios on existing ARMs loan programs, which exerted an upward pressure on the MCAI. This change affected conforming loan programs as well as agency jumbo programs, which focus on loans in high cost areas that exceed the baseline conforming loan limit of $424,000 but which are still eligible for purchase by the GSEs.”

A decline in the MCAI indicates lending standards are tightening while increases in the index are indicative of loosening credit, officials noted, referencing the index was benchmarked to 100 in March 2012.

The report determined of the four component indices, the Jumbo MCAI saw the greatest increase in availability over the month, followed by the Conventional MCAI and the Conforming MCAI. The Government MCAI decreased from last month.