[1]The Total Mortgage Credit Availability Index (MCAI) decreased in June, indicating that lending standards are tightening, according to a release from the Mortgage Bankers Association [2] on Tuesday.
The Total MCAI, which was benchmarked to 100 in March 2012, declined by 0.5 percent in June down to 122. The Conventional MCAI experienced the greatest decline in June (by 1.0 percent since May) out of the four component indices of the Total MCAI.
The Jumbo MCAI decreased by 0.6 percent, followed by the Conforming MCAI (0.3 percent) and the Government MCAI (0.2 percent).
"This month mortgage credit availability reverted to its April level taking back the gains observed in May. Despite recent signs of improvement in housing markets, mortgage credit availability stalled in June," said Lynn Fisher, MBA's Vice President of Research and Economics. "Increases driven by higher availability of cash out refinance loans were more than offset by reduced availability of other types of loans this month, resulting in a decline in the index from May."
The main difference between the Total MCAI and the component indices are the population of the loan programs in which they cover. The four component indices are calculated using the same methodology used to calculate the Total MCAI, and the component indices are designed to show relative credit risk/availability for their respective index, according to MBA. The Jumbo MCAI covers loans flagged as "Jumbo" and the Conforming MCAI covers loans that are subject to conforming loan limits. The Government MCAI covers loans backed by FHA/VA/USDA, while the Conventional MCAI covers non-government loan programs. The Conforming, Jumbo, and Total Indices all have a base level of 100, defined in March 2012, while the Conventional and Government Indices have adjusted base levels; MBA calibrated those two indices to better represent where they might fall in March 2012 relative to the benchmark of 100.