Mortgage Credit Availability Increases 1% in December: MBA

Mortgage credit availability loosened in December, according to a report from the Mortgage Bankers Association.

The Washington-based trade group said on Thursday that its Mortgage Credit Availability Index for December rose 1% from November, to 115.7. An increase in this index is indicative of a loosening of credit, while a decline means that lending standards are tightening.

The conventional MCAI was up by 2.2% and the government MCAI increased less than 1%, the MBA said.

"In early December both Fannie Mae and Freddie Mac announced new 97% LTV loan programs aimed at expanding access to credit for new and well-qualified homebuyers, resulting in a loosening of credit over the month," said Mike Fratantoni, chief economist for the Mortgage Bankers Association. "However, since only one of the two GSEs has gone live with their updates and the resulting investor pickup can be a delayed process, the impact of this announcement may take some time to fully quantify."

Fannie Mae launched its version of the low-down-payment 97% LTV program in mid-December. Since then, about one-quarter of the investors in the MCAI data have started offering this new loan program.

Freddie Mac's version will not go live until March.

The MBA's credit availability index analyzes data from Market Clarity, a mortgage origination research product produced by AllRegs in Eagan, Minn.