Housing Finance at a Glance: Monthly Chartbooks

The June 2020 edition of At A Glance, the Housing Finance Policy Center’s reference guide for mortgage and housing market data, includes updated figures describing first lien origination volume, cash-out refinances, national home price appreciation and credit availability for purchase loans.

Credit Box Narrows Slightly for Agency Refinance Mortgages

The characteristics of GSE and Ginne Mae or “agency” mortgages originated in January and April suggest that the mortgage credit box tightened in recent months, largely in the FICO score dimension, and specifically across refinance mortgages.  Debt-to-income (DTI) and combined loan-to-value ratio (LTV) characteristics appear mostly unchanged. But Mortgage Bankers Association data suggest that conditions continued tightening in May, particularly on GSE mortgages, suggesting that the April results may under-report the extent of tightening that has occurred in GSE mortgages.

Tighter lending standards on agency refinance mortgages partly reflect a still high unemployment rate, which raises the risk that some homeowners may not make their mortgage payment. Moreover, if the borrower requests forbearance prior to the sale of the loan to the GSEs or FHA, the lender must sell the loan at a penalty. And forborne mortgages have advancing requirements, imposing a further burden on the servicer.

The strong demand for refinance applications –which has fallen a bit from an earlier peak – is also contributing to tighter standards as lenders seek to manage their capacity. In response to strong demand for refinance mortgages, lenders typically tighten standards to manage their capacity. As a result, some homeowners’ ability to benefit from historically low mortgage rates and continued house price appreciation is reduced due to tighter standards on refinance mortgages.

MBA’s Mortgage Credit Availability Index (MCAI) through April suggests that lending standards on non-agency jumbo mortgages tightened more than agency mortgages. Over the month of April, the Conforming MCAI fell 7.1 percent and the Government MCAI fell 9.5 percent while the jumbo MCAI declined 22.6 percent. This difference likely reflects actions taken by the Federal Reserve in March to purchase agency mortgage-backed securities in unlimited amounts. And the May MCAI indicated that credit availability continued to tighten, however, the decline in Jumbo and Government mortgage credit availability slowed dramatically while the decrease in Conforming mortgage availability continued apace (4.4 and 0.8 percent v. 6.9 percent respectively).

These results suggest that the GSE mortgage credit box is tighter than what the mortgage data to date communicates.

Past chartbooks:

May 2020
April 2020
March 2020
February 2020
January 29th Chartbook call featuring Bob Broeksmit and Mike Fratantoni.
January 2020

December 2019
November 2019
October 2019
September 2019
August 2019
July 2019 (watch the July 29 chartbook call with guest Richard Green)
June 2019
May 2019
April 2019 (watch the April 29 chartbook call with guest Dave Stevens)
March 2019
February 2019
January 2019 (watch the January 30 chartbook call with guest Dave Stevens)

December 2018
November 2018
October 2018
September 2018
August 2018
July 2018
June 2018
May 2018
April 2018 
March 2018
February 2018
January 2018

December 2017
November 2017
October 2017
September 2017 
August 2017
July 2017
June 2017
May 2017
April 2017 
March 2017
February 2017
January 2017

December 2016
November 2016
October 2016
September 2016
August 2016 
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016 

December 2015
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June 2015
May 2015
April 2015
March 2015
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December 2014
November 2014
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August 2014
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June 2014
May 2014
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December 2013
November 2013
October 2013