“For the third month in a row, mortgage lenders and investors slightly expanded credit offerings in February on net, as a result of offsetting factors,” says Mike Fratantoni, MBA’s Chief Economist.
Recent qualified mortgage (QM) rules from the federal government have changed some of the loan products. MBA says an adjustable rate mortgage (ARM) must now qualify at the highest allowable rate for the first five years of the loan. As a result, many investors discontinued loans that adjust interest rates after only 3 years (3/1 ARMS).
But in response, lenders and investors have rolled out several new 5-plus year ARM programs, including those for jumbo loans.
The MCAI increased 0.44 percent from 113.0 in January to 113.5 in February. 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 the MCAI had been tracked in 2007, it would have been at a level of roughly 800, indicating the credit was much more available then.
© 2014 Florida Realtors®
Sarasota Area Real Estate Specialist