Mortgage

MBA: Credit loosens as lenders adjust to QM

How easy is it to get a mortgage?

The mortgage credit availability index ticked slightly higher in January and increased 1.85% from 110.9 in December to 113.0 in January, the latest Mortgage Bankers Association report said.

"Overall, mortgage lenders and investors slightly expanded credit offerings in January on net, but this represented the combination of two divergent trends,” said Mike Fratantoni, chief economist at MBA. 

“First, the market continues to adapt to the new QM regulation by eliminating products that do not fit inside of the QM box. This tightening is being offset, both in the market for higher balance loans, where lenders continue to loosen terms for jumbo loans, and in the refi market, where more lenders are offering streamline refinance programs," Fratantoni added.

The latest Federal Reserve's Senior Loan Officer Survey revealed that mortgage credit standards loosened somewhat among larger institutions, but tightened for smaller lenders, Fratantoni explained.  

“The data underlying the MCAI is predominantly from larger, wholesale lenders and investors,” he said. 

A drop in the MCAI shows that lending standards are tightening, while an increase indicates a loosening of credit. The index was benchmarked to 100 in March 2012, and if it had been tracked in 2007, it would have been at a level of roughly 800. 

As HousingWire reported Monday,  “A majority of consumers now believe that it is getting easier to get a mortgage. For the first time in the National Housing Survey’s three-and-a-half-year history, the share of respondents who said it is easy to get a mortgage surpassed the 50% mark, exceeding those who said it would be difficult by 7 percentage points,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.

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