Originators continued
Its Mortgage Credit Availability Index fell to 96.3 in July, compared with 96.6 for June and
"Mortgage credit availability declined to its lowest level since 2013, as lenders pulled back on underutilized loan programs and as liquidity concerns remain for some jumbo lenders," said Joel Kan, deputy chief economist, in a press release. "Declining origination volumes have led to lower profitability for many lenders, resulting in narrower loan product offerings to reduce operational costs."
In particular, as interest rates rose during the month, originators pulled cash-out refinance products from their menu, Kan pointed out. Borrowers instead sought home equity and unsecured consumer loans to meet that need.
This marks
While the total MCAI dropped 0.3% month-to-month in July, the conventional product index was down 0.5%.
The component of the conventional MCAI that measures conforming credit rose 0.2% versus June, which is indicative of lenders loosening product guidelines for government-sponsored enterprise mortgages.
But the jumbo portion declined for the third straight month, this time by 0.8%. Banks are the primary source of jumbo product offerings because they are not obligated to sell them in the secondary market.
However, the fallout from the failures of Silicon Valley Bank, Signature Bank and First Republic Bank, and
For the week of July 7,
Meanwhile, the government MCAI fell by 0.1% in July from June.
The MBA uses data from ICE Mortgage Technology (the successor owner of original partner AllRegs) to calculate the index.