Jumbos, streamline refis drive uptick in mortgage credit availability

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Mortgage credit availability jumped in November, driven in part by the first government market increase seen in months, according to the Mortgage Bankers Association.

November's Mortgage Credit Availability Index increased by 2.1% to 188.9 from 185.1 in October. However, it only inched up from 188.8 in November 2018.

The government index — which measures the availability of Federal Housing Administration, Department of Veterans Affairs and U.S. Department of Agriculture products — led all components with a 2.9% increase, its first since February.

The conventional index, which measures activity in the conforming and jumbo markets, also increased in November when it climbed 1.4% to another survey high. The conforming index edged up by 0.2%; and the jumbo index increased 2.2% over the previous month.

"Credit availability rose for the third straight month in November, with an increase in supply across all loan types," Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release.

"Most notably, the jumbo index climbed to yet another record high, as investors increased their willingness to purchase loans with lower credit scores and higher LTV ratios. Additionally, the government index saw its first increase in nine months, driven by streamline refinance programs. Expanding credit availability will continue to support active levels in mortgage lending, even as refinance activity starts to level off."

The MCAI is calculated by the MBA using loan program data from Ellie Mae's AllRegs Market Clarity database with a benchmark of 100 in March 2012. A lower index value indicates lenders are tightening their credit standards while a higher one indicates guidelines are looser.

Today's MCAI is still far below the values established using historical data for mortgage credit availability during the boom period that ended in 2006.

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