"Mortgage credit availability increased in January, as lenders broadened their offerings of ARM loans, cash-out refinances, and loans on second homes. Most of these require lower LTV and higher credit scores, said Joel Kan, MBA's vice president and deputy chief economist. The beginning of the year is typically when lenders start to position themselves for the spring homebuying pick up, and recent dips in mortgage rates have provided windows of refinance opportunities, including refinances into ARM loans."
"The MCAI analyzes loan program data provided by ICE Mortgage Technology and is designed to track changes in lending standards over time. A declining index indicates tightening credit conditions, while increases reflect easing standards. The MBA also publishes component indices to track specific segments of the market. The government index reflects FHA, VA and USDA programs, while the conventional index covers non-government loans. The jumbo and conforming indices are subsets of the conventional index, distinguishing between loans above and below conforming loan limits."
Mortgage credit availability increased in January, led primarily by a 2.1% rise in conventional loan availability. Availability of government-backed loans, including FHA, VA and USDA programs, edged up 0.1%. Within conventional loans, jumbo availability climbed 2.9% while conforming availability was unchanged. Lenders expanded offerings of ARM loans, cash-out refinances, and loans on second homes, which generally require lower LTVs and higher credit scores. Early-year lender positioning for spring homebuying and recent dips in mortgage rates created refinance windows, including moves into ARMs. The MCAI tracks lending standard shifts using ICE Mortgage Technology data and includes component indices for market segments.
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