Credit availability decreased in November for the first time since early summer.  The Mortgage Bankers Association (MBA) said its Mortgage Credit Availability Index (MCAI) eased back 0.8 percent from its October level to 127.4 percent.  A decline in the index indicated that lending standards are tightening.  MBA said a reduction of adjustable rate mortgage programs (ARMs) were the main reason for the decrease in the index.

Three of the four component indices also declined.  The Conventional MCAI tightened the most, falling 2.0 percent over the month followed by the Conforming MCAI which was down 1.0 percent.  The Jumbo MCAI declined by 0.8 percent while the Government MCAI saw a very slight rise, up 0.1 percent over the month.

The MCAI is calculated using several factors related to borrower eligibility (credit score, loan type, loan-to-value ratio, etc.). These metrics and underwriting criteria for over 95 lenders/investors are combined by MBA using data made available via the AllRegs® Market Clarity® product and a proprietary formula derived by MBA to calculate the MCAI, a summary measure which indicates the availability of mortgage credit at a point in time.

The MCAI was benchmarked to 100 in March 2012. The four components are constructed using the same methodology as the Total MCAI and are designed to show relative credit risk/availability for their respective index. 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.