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New MBA and AllRegs Collaboration to Gauge Trends in Mortgage Market

Robert Ottone
Jun 25, 2013

The Mortgage Bankers Association (MBA) has announced a partnership with AllRegs to deliver the monthly Mortgage Credit Availability Index (MCAI), a sampling of all current mortgage underwriting data from AllRegs and the MBA’s currently-existing databases to better provide a roundabout index number to determine whether or not mortgage credit is available. By using various factors related to borrower eligibility (including credit score, loan type, loan-to-value ratio and others), the MCAI is tabulated with metrics and underwriting criteria from over 85 lenders and investors. “In order to create the Index, we grouped lenders and investors together,” said Mike Fratantoni, MBA's VP of research and economics. “Loan size has seen almost a 60 percent growth in jumbo loans, but at the other end of spectrum, we’ve seen a decline.” Jeff Hoerster, president and COO of AllRegs said theat the MCAI had been evolving since 2004. "We amassed a library of loan products, we narrowed down 45 points into a database and distilled them further into various other data," said Hoerster. "From there, we’ve gotten a ton of datapoints that allow us to assess the regulatory impact.” While the MCAI is subject to change, there is only one base index as it exists currently. The Index differs from the Federal Reserve’s Loan Officer Survey in that it utilizes currently-existing material and metrics as opposed to soliciting the answers to questions posed to junior loan officers. When asked about how the index could continue to grow, through inclusion of other lenders or investors, Hoerster responded, “The criteria for inclusion is dependent on the lenders we serve, but the market is ever-changing. The demand is always changing, too. As our clients ask us about certain lenders and companies, that will indicate to us that a lender is a legitimate competitor in the field.” The MCAI measures current trends in the mortgage market, all of which lean towards lower mortgage credit availability. Levels are currently trending closer to those found back in 2011, which is around the time the MBA and AllRegs began tracking the index. The index has shown an upward trend for the months of April and May and both are approaching a benchmark level last seen in March of 2012. “We expect the MCAI will be a valuable new source of information for market participants, policymakers and researchers,” Fratantoni said.
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