While federal agencies are concerned about how tight mortgage lending credit standards have become since the financial market and housing industry collapse of 2008, economists at the Mortgage Bankers Association (MBA) noted a loosening of mortgage credit availability last month.

While federal agencies are concerned about how tight mortgage lending credit standards have become since the financial market and housing industry collapse of 2008, economists at the Mortgage Bankers Association (MBA) noted a loosening of mortgage credit availability last month.

According to the MBA’s Mortgage Credit Availability Index (MCAI), a report that analyzes data from Ellie Mae’s AllRegs Market Clarity business information tool, the index increased 2.3 percent to 121.4 in March.

The MCAI is calculated using several factors related to borrower eligibility, such as credit score, loan type and loan-to-value ratio. Metrics and underwriting criteria for more than 95 lenders and investors are combined by MBA using data made available via the AllRegs Market Clarity product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time. The index was benchmarked to 100 in March 2012. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit.

MBA Chief Economist Mike Fratantoni attributed the loosening of credit to several factors, including Freddie Mac’s introduction of an 97 LTV program (Fannie Mae’s was implemented in December); additional loosening of parameters on jumbo loan programs; an increase in offerings of cash-out refinance loans; and continued expansion of the Federal Housing Administration (FHA) streamline refinance and VA Interest Rate Reduction Refinance Loan (IRRRL) programs.

“Although credit remains tight by historical standards, this increase in availability, coupled with low rates and job market strength, should lead to stronger home purchase activity this spring,” Fratantoni said.

The FHA announced last week that that it will explore “alternative” credit scoring models to expand access to mortgages for would-be homebuyers.

Email Amy Swinderman.

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Prepare for this fall with top agents & brokers at Connect Now this Tuesday.GET YOUR TICKET×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription