Access to mortgage credit is at its highest level in at least three years, and credit standards are expected to loosen even more this year, according to a newly-released index by the Mortgage Bankers Association.
MBA’s index, which tracks mortgage credit availability, shows that in March the gauge rose to 114 – the highest reading in the gauge’s three-year history.
“I don’t think there’s any question that mortgage underwriting has gotten easier or is looser than it was two or three years ago, but it’s nowhere near where it was in 2005, 2006,” Guy Cecala, publisher Inside Mortgage Finance, told The Wall Street Journal. “We are talking about easing from extremely tight underwriting standards.”
Some housing experts have been concerned that new mortgage rules for lenders and borrowers this year would tighten credit access. Indeed, 80 percent of bankers said they expected the new regulations to have a “measurable reduction in credit availability,” according to a survey by the American Bankers Association. However, Bob Davis, ABA’s executive vice president, says standards will likely loosen up as lenders adapt to the new rules.
“There will be a tendency for some liberalization over the course …read more