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Jumbo mortgage credit availability at record levels: MBA

September's increase in mortgage credit availability was driven by the expansion of jumbo and other nonconforming products to record levels, which overcame a retrenchment in both conforming and government programs, the Mortgage Bankers Association said.

The Mortgage Credit Availability Index rose 0.9% to 183.4 from 181.7 in August; the index in September 2018 was 182.1.

But even with the increase in the index, which is the first monthly rise since June, mortgage credit availability is at its tightest since March.

"Credit availability increased slightly in September, driven by a 5% increase in the supply of jumbo loans," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. "The jumbo index, which grew from a combination of lower credit score requirements, non-qualified mortgage loans and investor products, is now at a record high since tracking began in 2012. Meanwhile, the trend of tightening credit availability in conforming and government programs continued over the past few months, as both indices decreased."

The conventional MCAI increased by 2.4% compared with August. This index is broken into two segments, the jumbo MCAI, which rose by 4.7%, and the conforming portion, which fell by 1.1%.

Conforming lenders have pulled back on the number of loan programs available every month since May.

Meanwhile the government MCAI decreased by 0.6%, continuing the tightening in Federal Housing Administration, Veterans Affairs and U.S. Department of Agriculture product offerings that has been ongoing since 2017.

The MCAI is calculated by the MBA using loan program data from Ellie Mae's AllRegs Market Clarity database. It was benchmarked to a value of 100 based on conditions in March 2012.

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