An increase availability of high balance loans helped drive the Mortgage Bankers Association's (MBA's) Mortgage Credit Availability Index (MCAI) to a three-month high in May.  MBA said the Index rose 1.5 percent to 180.6.  An increase in the MCAI is indicative of loosening credit standards while a decline means those standards are tightening.

All four components of the MCAI posted increases. The Conventional MCAI rose 2.0 percent from the April level and the Government index was up 1.0 percent.  The Jumbo index and the Conforming Index were up 2.2 percent and 1.9 percent respectively.

"The expansion of offerings across all loan types drove credit availability to its highest level in three months," Joel Kan, MBA's Associate Vice President of Economic and Industry Forecasting said.  "In particular, the conventional index and jumbo index both rose to their highest levels since March 2011. This was mainly caused by increased investor interest in jumbo loans and high balance conforming loans."

The Conforming and Jumbo indices have the same "base levels" as the Total MCAI (March 2012=100), while the Conventional and Government indices have adjusted "base levels" in March 2012. MBA calibrated the Conventional and Government indices to better represent where each index might fall in March 2012 (the "base period") relative to the Total=100 benchmark.