Mortgage credit availability falls as fewer government loans offered

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Lenders offered fewer government-guaranteed mortgage programs in September, leading to an overall decline in mortgage credit availability, according to the Mortgage Bankers Association.

The MBA's Mortgage Credit Availability Index fell by 0.8% in September to 182.1, compared with August's 183.5 and a post-crash high of 184.1 in July. September 2017's MCAI was 181.4.

The government component of the MCAI fell by 2.5% to its lowest point since July 2015, Joel Kan, the MBA's associate vice president of economic and industry forecasting, said in a press release. This portion of the index has been trending downward since peaking in April 2017.

"The decline in government credit was driven by fewer streamline offerings as well as a decline in loan programs with lower credit requirements," Kan said.

On the other hand, the conventional MCAI was up 1.2% from August, as a 2.7% increase in the jumbo component more than offset a 0.7% decline in the conforming subindex. This was the first time in six months that lenders reduced the number of conforming mortgage offerings.

"The jumbo subindex increased for the fifth time in six months and reached its highest level since we started tracking jumbo credit," said Kan.

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.

Even as the current index remains near its post-crisis high, it 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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