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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 50 January 2025 J O U R N A L • The share of originations from non-depository institutions kept ris- ing. Independent mortgage business- es and other non-depository entities created a lot more loans than banks and credit unions. Nearly 62% of all closed-end house purchase loans and more than 64% of refinance loans were originated by independent mortgage companies in 2023. LENDING STANDARDS TIGHTEN AS CREDIT AVAILABILITY SLIPS T he Mortgage Credit Availabil- ity Index (MCAI), a survey from the Mortgage Bankers Association (MBA) that examines data from ICE Mortgage Technology, shows a decline in mortgage credit availability in November. While an increase in the index sig- nifies loosening credit, a decrease in the MCAI suggests tightening lending rules. Overview of the November Mort- gage Credit Availability Index: • In November, the MCAI dropped 3.3% to 95.9. • In March 2012, the index was benchmarked at 100. • While the Government MCAI fell by 3.9%, the Conventional MCAI fell by 2.7%. • The Conforming MCAI dropped by 6.6%. • The Jumbo MCAI dropped by 0.9% among the Conventional MCAI's component indices. "Credit availability tightened consid- erably in November, pushing the index to the lowest level in five months," said Joel Kan, MBA's VP and Deputy Chief Economist. "Part of the decline was attributable to investors pulling back on high LTV and low credit score programs for both fixed and ARM loans, as well as further exits from the broker channel in an originations market that is still challenging for many lenders. The most notable impact was on the government index, which decreased to its lowest since December 2012." Measuring the Jumbo MCAI Component Indices, Conventional, Government, and Conforming Loans In November, the MCAI dropped 3.3% to 95.9. While the Government MCAI fell by 3.9%, the Conventional MCAI fell by 2.7%. The Conforming MCAI dropped by 6.6%, while the Jumbo MCAI dropped by 0.9% among the Con- ventional MCAI's component indices. Using the same technique as the Total MCAI, the Conventional, Govern- ment, Conforming, and Jumbo MCAIs are created to demonstrate the relative credit risk and availability for their respective indices. The population of loan programs that are examined is the main distinction between the Compo- nent Indices and the entire MCAI. While the Conventional MCAI looks at non-government loan pro- grams, the Government MCAI looks at FHA, VA, and USDA loan programs. FHA, VA, and USDA loan offerings are not included in the Jumbo and Conforming MCAIs, which are a subset of the standard MCAI. Conventional lending programs that come inside conforming loan limits are examined by the Conforming MCAI, whereas conventional programs outside of conforming loan limits are examined by the Jumbo MCAI. AFTER RECORD HIGHS, DOWN PAYMENTS DROPPED IN Q3 D own payment shares peaked early this year, in Q2 2024 versus the normal Q3 trend, ac- cording to Realtor.com's bi-annual down payment report. Nationwide, down payments in Q3 of 2024 averaged 14.5% with a median down payment of $30,300, down from Q2 2024's historical peak of "Credit availability tightened considerably in November, pushing the index to the lowest level in five months." —Joel Kan, VP and Deputy Chief Economist, MBA