Access to Mortgage Credit Increased in October

Mortgage credit availability increased slightly in October according to the Mortgage Credit Availability Index (MCAI), a report from the Mortgage Bankers Association (MBA) which analyzes data from the AllRegs Market Clarity product. The MCAI increased 0.7 percent to 111.5 in October following two consecutive months of decline in August and September. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of a loosening of credit. The index was benchmarked to 100 in March 2012. If it had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available at that time. Mortgage credit loosened slightly in October relative to September. In October, some investors reduced minimum credit scores on certain products. At the same time, other investors reduced the availability of cash-out refinances and limited other programs to primary residences in programs which previously allowed for second and investor homes. The net impact was a slight increase in the index for the month.