Mortgage Credit Availability Rises in February

Mortgage credit availability increased slightly in February, according to data released by the Mortgage Bankers Association Thursday.

The MBA's Mortgage Credit Availability Index increased by 0.7% to 118.6 in February, indicating a loosening of credit. The improvement was fueled by increases in jumbo loan programs and more lenders adding Fannie Mae’s 97% loan-to-value ratio program, MBA chief economist Mike Fratantoni said in a news release accompanying the data.

"More than half of investors are now offering a 97 LTV program, and Freddie Mac announced that their program will be available in mid-March," Fratantoni said. Conforming credit, one of the four component indices of the MCAI, was hit with tighter restraints on cash-out loans and investors with multiple financed properties, he added. The component decreased slightly to 113.4 in February from 113.6 the month prior.

The other components all rose: the jumbo MCA increased by 1.4% and both the conventional and government MCAI, which examine nongovernmental and FHA/VA/USDA loans, respectively, went up 0.6%.

The MCAI is created with a proprietary formula derived by the MBA. The index takes into account several factors related to borrower eligibility and underwriting criteria for more than 95 lenders/investors, using data obtained through the AllRegs Market Clarity product.

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