MBA: New Government Incentives Boost Mortgage Credit Slightly In January

Posted by Patrick Barnard on February 05, 2015 No Comments
Categories : Residential Mortgage

Mortgage credit availability increased 1.8% in January compared to December to reach a score of 117.8 on the Mortgage Bankers Association's (MBA) Mortgage Credit Availability Index (MCAI), which analyzes data provided by AllRegs.

Mike Fratantoni, chief economist for the MBA, attributes the slight increase to the launch of Fannie Mae's new 97% loan-to-value (LTV) program (Freddie Mac's program won't launch until March), as well as the recent cuts to the Federal Housing Administration's (FHA) mortgage insurance premiums (MIP).

‘Since these announcements, roughly 40 percent of investors have begun to offer versions of the Fannie Mae 97 percent LTV program,’ he says in a release. ‘And the conventional mortgage credit availability index increased three percent over the month as a result. Although the FHA MIP reductions went into effect January 26, this initiative will be less likely to impact the MCAI, as it impacts pricing rather than availability of government credit.’

Starting this month, the MBA has added two new credit availability indices: the Jumbo MCAI and Conforming MCAI. These are in addition to two other ‘sub-indexes’ already offered in the report: the Conventional MCAI and the Government MCAI.

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