Credit diverges: Jumbo rises, FHA slips Government loan performance issues prompted tighter underwriting in the past month, but credit availability expanded in other parts of the market, according to a Mortgage Bankers Association analysis. Availability in the jumbo sector, which includes loans made outside of the regulatory definition for a standard "qualified mortgage," expanded 2.9%, the Mortgage Credit Availability Index shows. In contrast, government loan credit availability contracted 0.8%. The two categories represent opposite ends of the spectrum that have become particularly important to watch on the index, which is based on an analysis of ICE Mortgage Technology's data and registered a collective increase of 1.1% to 107.1 for all loan products. "The jumbo index increased by 3% for the second straight month, again driven by growth in non-QM loan programs," said Joel Kan, MBA's vice president and chief economist, in a press release. Higher Federal Housing Administration delinquencies likely led to government sector contraction, he said, noting that most of the past month's stemmed from cash-out refinance and investor loans, with limits on loan-to-value ratios. Underwriting factors to watch include a focus on home equity, which has built up significantly. "We have this tremendous build up in home equity, and that will help us weather any type of storm, whether that's an economic downturn, whether it's increases in property taxes and insurance, it will help," Walsh told attendees at the MBA's mortgage servicing conference last month. "Certainly we have affordability issues, but particularly for those borrowers who originated a loan during the pandemic, or before this home equity accumulation, it will certainly help temper ramifications of any type of economic downturn," she added.#mortgage_bankers_association #ice_mortgage_technology #joel_kan #fhfa #kbra
Mortgage Credit Supply Expands as Refinance Activity Grows The Mortgage Credit Availability Index (MCAI), a survey from the Mortgage Bankers Association (MBA) based on data from ICE Mortgage Technology, showed an increase in mortgage credit availability in February. The index rose by 1.1% to 107.1, reflecting broader access to lending. A declining MCAI signals tighter lending rules, while a rising index indicates more lenient credit conditions. The index was benchmarked at 100 in March 2012. Among the components, the Government MCAI fell by 0.8%, while the Conventional MCAI rose by 2.7%. Within the Conventional MCAI, the Conforming MCAI increased by 2.0%, and the Jumbo MCAI rose by 2.9%. Joel Kan, MBA’s VP and Deputy Chief Economist, noted that lenders expanded mortgage credit supply in February, particularly for refinancing, as mortgage rates declined in January and February. Most of the growth in credit supply was concentrated in loan programs allowing cash-out refinance and investor home purchases, though these remained limited to borrowers with lower loan-to-value (LTV) ratios. The Jumbo MCAI saw a 3% increase for the second consecutive month, driven by growth in non-qualified mortgage (non-QM) loan programs. The Government MCAI was the only component to decline, as lenders tightened underwriting standards in response to a recent rise in FHA mortgage delinquency rates. The iMortgage Indices—Government, Conforming, and Jumbo MCAI—highlight specific trends. The Jumbo MCAI increased by 2.9% among the Conventional MCAI’s component indices, while the Conforming MCAI rose by 2.0%. The Conventional MCAI itself grew by 2.7%, and the Government MCAI dropped by 0.8%. The MCAI’s overall increase to 107.1 underscores broader improvements in credit availability.#mortgage_bankers_association #ice_mortgage_technology #joel_kan #government_mcai #conventional_mcai
Wednesday’s Economic Calendar The Mortgage Bankers' Association compiles various mortgage loan indexes, with the purchase applications index measuring applications at mortgage lenders. This index is a key indicator of housing market activity and is typically released at 7:00 AM. The Consumer Price Index (CPI) is another critical economic metric, tracking changes in the average price level of goods and services. While the CPI is often used to gauge inflation, the text provided here appears to be incomplete, cutting off mid-sentence. Additional details about the CPI or other economic indicators would be necessary to fully contextualize the data. The article also includes placeholder text related to search functionality, such as instructions for entering text into an input field to update search results. These elements are likely part of the website’s interface rather than the main content. The focus of the article remains on the economic calendar, highlighting scheduled reports and their significance for market analysis. However, the incomplete nature of the CPI explanation suggests that the full article may not be fully available in the provided text.#mortgage_bankers_association #consumer_price_index #economic_calendar #housing_market_activity #market_analysis
The Disappearing American Mortgage The mortgage, once a cornerstone of wealth building for generations of Americans, is vanishing. Data from the Mortgage Bankers Association reveals that Americans are applying for fewer mortgages than at any point in the past 25 years, including during the worst of the Great Recession, when unemployment was more than double its current rate. Since the end of 1999, 96 of the 100 lowest readings in the MBA’s weekly index of new mortgage applications have occurred in the past three years. The American real-estate market is effectively frozen, despite mortgage rates falling below 6 percent for the first time since 2022. Few families are buying or selling homes, and little new housing is being built. High prices and rising interest costs have pushed working-class households out of the market, while wealthy individuals dominate transactions. Young people face a future of perpetual renting, with less time to build home equity and a higher risk of being poorer in retirement than their parents. This trend has multiple causes. After the Great Recession, the Dodd-Frank Act tightened lending and underwriting standards, shifting credit toward wealthy households and away from middle-income families. Mortgage lenders increased credit for affluent buyers while reducing access for working-class households. Banks prioritized services like home loans, credit cards, and brokerage accounts for the well-to-do, while neglecting basic loans for working families. These changes made the financial system safer but also made homeownership harder for many. At the same time, home builders sharply cut construction in the early 2010s, producing a quarter as many homes as before the Great Recession.#federal_reserve #mortgage_bankers_association #doddfrank_act #harvard_joint_center_for_housing_studies #chris_herbert
