Mortgage credit availability creeps up in March
Cash-out refis, 97% LTVs made it looser
Mortgage credit availability increased in March according to the Mortgage Credit Availability Index, a report from the Mortgage Bankers Association analyzing data from Ellie Mae.
The MCAI increased 2.3% to 121.4 in March.
A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012.
“A number of factors contributed to a loosening of credit in March: Freddie Mac’s introduction of their 97 LTV program (Fannie Mae’s was implemented in December), additional loosening of parameters on jumbo loan programs, an increase in offerings of cash-out refinance loans, and continued expansion of the (Federal Housing Administration) streamline refinance and VA Interest Rate Reduction Refinance Loan programs,” according to Mike Fratantoni, MBA’s chief economist.
“As a result of these changes, all four component indexes of the MCAI increased last month: jumbo, conforming, conventional, and government. Although credit remains tight by historical standards, this increase in availability, coupled with low rates and job market strength, should lead to stronger home purchase activity this spring,” he said.