As we look at some of the mortgage data released by the Mortgage Bankers Association (MBA) from September 2019, one thing definitely stands out. Credit availability increased slightly this past month after a large decline in August. In fact, the 3.9 percent drop in August represented the largest monthly decline in history for the Mortgage Credit Availability Index (MCAI). Therefore, it was nice to see an increase of 0.9 percent in September, which represents at least a slight sign of recovery.

Jumbo Credit Availability

The main reason for this increase in the MCAI was because the availability of jumbo credit rose significantly. It jumped by 4.7 percent last month, which is a record high. That means there were more jumbo mortgage loans available for higher-end real estate purchases.

The September 2019 Mortgage Credit Availability Index was measured using four components:

1. Government MCAI – Decreased by 0.6 percent

2. Conventional MCAI – Increased by 2.4 percent

3. Conforming Index – Decreased by 1.1 percent

4. Jumbo Index – Increased by 4.7 percent

Other Factors

Various factors go into calculating the MCAI. This includes borrower eligibility data such as credit score, loan-to-value ration, loan types and more gathered from more than 95 investors and lenders). This data is combined with information from Ellie Mae’s AllRegs proprietary product to calculate the available of mortgage credit over a certain period of time.

“The jumbo index, which grew from a combination of lower credit score requirements, non-QM loans, and investor products, is now at a record high since tracking began in 2011,” says Joel, Kan, Associate VP of Economic and Industry Forecasting at the MBA. “Meanwhile, the trend of tightening credit availability in conforming and government programs continued over the past few months, as both indices decreased.”

Mortgage Impact

It’s very unusual to see jumbo loans and jumbo credit availability on the rise while conventional and government loans are slowly declining. It shows that lenders have more faith in larger mortgage loans right now. It may also speak to rising home prices. It will be interesting to see if this trend continues or if it is just a unique blip on the radar. Only time will tell.

Whatever type of mortgage loan or home refinancing program you are looking for, Transparent Mortgage is here to help provide the guidance and support you need to make the right financial decisions. Call us today at (619) 701-3906.

Beau Hodson

Beau Hodson

About the Author Since 2003, Beau has been a mortgage professional and is a leading mortgage broker and lender in San Diego. As Founder and Senior Mortgage Advisor at Transparent Mortgage, he is truly committed to serving the needs of his clients and raising industry standards for integrity and transparency.