Some lenders are expanding their product offerings despite tight industry capacity
There was an uptick in mortgage credit supply in August as lenders expanded some loan offerings.
The Mortgage Credit Availability Index (MCAI) climbed 0.3% to 96.6 thanks to an increase in some products, including cash-out refis and jumbo loans, the Mortgage Bankers Association said Tuesday.
However, the MCAI remained close to its lowest level in over a decade, according to MBA deputy chief economist Joel Kan.
The availability of conventional loans increased by 0.6% in August, while the government loan supply flattened. Of the component indices of the Conventional index, the jumbo MCAI jumped 2.7% after three consecutive months of decline. The conforming MCAI, on the other hand, fell 2.7% to its lowest level since 2011.
“The overall increase was driven by an increased number of loan programs that included parameters such as cash-out refinances and mid-range credit scores,” Kan said in MBA’s latest report.
In an effort to cut costs and boost profitability, lenders continue to reduce staffing and simplify their product offerings – leading to the overall decline in credit supply.
“While this dynamic has led to lower credit availability, it has also provided some lenders with new opportunities to expand some of their product offerings, and we saw some of that growth in the jumbo space last month,” Kan added.
One example is United Wholesale Mortgage, which extended its jumbo line-up with six new offerings and an enhanced down payment assistance product. The wholesale giant also expanded its Safe Check program last week to cover jumbo, government, and conventional loans.
Read more: UWM aims to lower credit costs with new offering
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