Several factors combined to improve access to mortgage
credit last month with the greatest gains coming in conforming loans. The Mortgage Bankers Association (MBA) said
its Mortgage Credit Availability Index (MCAI) rose to 121.4 in March, a
month-over-month increase of 2.3 percent.
An increase in the index indicates that lending standards are easing.
Mike Fratantoni, MBA’s
Chief Economist said, “A number of factors contributed to a loosening of
credit in March: Freddie Mac’s introduction of their 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 FHA streamline refinance and VA Interest Rate
Reduction Refinance Loan (IRRRL) programs. As a result of these changes, all
four component indexes of the MCAI increased last month: jumbo, conforming,
conventional, and government. 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.”