A decline in jumbo mortgage availability drove overall mortgage credit availability in April to its lowest level since 2014, according to the Mortgage Bankers Association.
The MBA’s Mortgage Credit Availability Index, which analyzes data from Ellie Mae,, fell by 12.2 percent to 133.5 in April. A decline in the MCAI indicates that lending standards are tightening, while increases in the index are indicative of loosening credit. The index was benchmarked to 100 in March 2012.
Availability of conventional mortgages decreased 15.2 percent, while the availability of government-backed loans decreased by 9.5 percent. Availability of jumbo mortgages decreased by 22.6 percent, and availability of conforming mortgages fell by 7.1 percent.
“The abrupt weakening of the economy and job market – and the uncertainty in the outlook – drove credit availability down in April for the second consecutive month,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement. “The overall index fell to its lowest level since December 2014, and the sub-indexes pointed to tightened credit supply for all loan types. The decline was largely driven by lenders dropping many low credit score and high-[loan-to-value] programs, as well as further reduction in jumbo and non-QM products.”
Kan added that April also saw a large decline in loan offerings for cash-out refinances because Fannie Mae and Freddie Mac had put constraints on purchasing cash-outs that have fallen into forbearance.
