Policy changes make it difficult to get a mortgage


In June, there was a significant loss of access to credit. The Mortgage Bankers Association (MBA) reports that its Mortgage Affordability Index (MCAI) fell 8.5% from the previous month to 118.8, its lowest level in nine months. A decline in MCAI indicates tightening lending standards, while an increase in the index indicates weakening credit.

All MCAI components went down below. The regular MCAI was down 17.1 percent, while the state MCAI was down 1.4 percent. Of the component indices of the regular MCAI, the Jumbo MCAI was down 11.5 percent and the corresponding MCAI was down 23.5 percent.

“Mortgage availability fell in June to its lowest level since September 2020, completion of more than six months of growth in credit supply. The overall credit affordability index remains close to the 2014 low as mortgages did not recover from a sharp downturn in the first half of 2020, said Joel Kahn, MBA’s deputy vice president of economic and industry forecasting. as a result of GSE policy changes that reduced the availability of high LTV refinancing loans, which affected both qualifying loans and high balance sheet loans meeting the GSE criteria. We have indeed seen the addition of refinancing programs aimed at cutting costs for lower-income borrowers, but the full impact of these new lending programs remains to be seen. In addition to reduced supply due to policy changeARM’s giant offerings also rolled back, resulting in the lowest giant loan supply since February 2021. ”

The MCAI and each of its components are calculated using several factors related to the eligibility of the borrower (credit rating, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders / investors are combined by the MBA using data available through a proprietary product from Ellie Mae. The resulting calculations are aggregates that indicate the availability of a mortgage at a given point in time. Base period and values ​​for the final index March 31, 2012 = 100; Conventionally March 31, 2012 = 73.5; Government March 31, 2012 = 183.5.

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