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Mortgage Credit Index Launched

Credit availability trending higher


June 25, 2013

By Mortgage Daily staff


A brand new index attempts to measure the availability of mortgage credit based on changes to underwriting guidelines. The inaugural report indicates that credit availability stands substantially lower than prior to the financial crisis.

The index, the Mortgage Credit Availability Index, utilizes current mortgage underwriting parameters to measure credit conditions on a monthly basis.

Among the borrower eligibility factors considered are credit scores, loan type and loan-to-value ratios. The factors are analyzed to determine whether overall mortgage credit is more or less available from month to month.

The index, which considers metrics and underwriting criteria for more than 85 lenders or investors, is based on data provided by AllRegs and a formula derived by the Mortgage Bankers Association, according to an announcement Tuesday.

Guidelines for all origination channels are considered, and respondents include investors of all sizes that purchase loans for servicing, securitization or trading in the secondary market.

AllRegs, a Mortgage Daily advertiser, collects the data through its Market Clarity product.

Policymakers will be able to observe the impact of policy changes using the MCAI, while economists and researchers will benefit from the index's ability to capture credit trends, MBA Vice President of Research and Economics Mike Fratantoni said in the news release.

The index was little changed in May, rising to 108.87 from 108.56 during April.

The MCAI was under a hundred during at least two months last year and exceeded 110 during some of 2011 -- when tracking began.

This year's upward trend was partially attributed to the Home Affordable Refinance Program, which "continues to be an important component of the market," according to Fratantoni.

"If the index had been tracked in 2007, it would have been roughly 800," the announcement stated.

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