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Forbearance and Late Payments are Making Mortgages Harder to Get
Tuesday, October 13, 2020
Mortgage credit tightened again in September, reaching
a second successive six-year low. The Mortgage Bankers Association (MBA) said
its Mortgage Credit Availability Index (MCAI) dropped another 1.9 percent to
118.6. A decline in the MCAI indicates that lending standards are tightening,
while increases in the index are indicative of loosening credit. The new number
is down 63.3 points from the level it reached in January before interest rates
started an unprecedented decline and servicers were instructed to grant forbearances
to existing borrowers. Three of the four components of the MCAI declined compared to August. The
Conventional MCAI decreased 6.1 percent and its two components, the Jumbo MCAI and
the Conforming index fell by 2.1 percent and 9.5 percent, respectively. The
Government MCAI increased by 1.4 percent.
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