TheMReport — News and strategies for the evolving mortgage marketplace.
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the latest SERVICING Or ig i nat ion s e r v ic i ng a na ly t ic s se c on da r y m a r k e t QM Credit Crunch The industry's anticipation of the QM rules has lenders tightening their belts in terms of credit standards. M ortgage credit availability tightened again in September as lenders continued to cut programs that fall outside the Consumer Financial Protection Bureau's (CFPB) qualified mortgage (QM) criteria. The Mortgage Bankers Association's (MBA) Mortgage Credit Availability Index (MCAI) decreased 0.7 percent to 110.7, matching August's decline. "Credit availability tightened last month as more lenders removed program offerings with loan terms greater than 30 years and/or interest-only features, similar to the trend we observed last month," said Mike Fratantoni, MBA's VP of research and economics. "Just as before, we believe this reflects lenders' implementation of the ability to repay/qualified mortgage regulation, which comes fully into effect in January." At the same time, MBA observed increased willingness among lenders to offer higher loan-to-value ratio loans— particularly to jumbo borrowers— offsetting some of September's overall decrease in credit availability. The MCAI, put together with data made available through AllRegs' Market Clarity product, is calculated using metrics and underwriting criteria from more than 85 lenders. The index was benchmarked at 100 in March 2012; if it had been tracked in 2007, it would have been at a level of roughly 800. The M Report | 45