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Think Tank Concludes Mortgage Guidelines Could Safely be Twice as Risky

Posted To: MND NewsWire

The Urban Institute’s (UI’s) Housing Finance Policy Center has updated its credit availability index (HCAI) to reflect data for the second quarter of 2020. The Index shows a slight dip from an adjusted 5.3 percent in the first quarter to 5.2 percent in the second quarter. Tightening in the GSE and government channels has driven a retraction of credit availability through the first half of 2020, as the risk in the portfolio and private-label securitization market remains a shadow of what it once was. The HCAI measures the percentage of owner-occupied home purchase loans that are likely to default-that is, go unpaid for more than 90 days past their due date. When the HCAI declines it indicates the lenders have a greater unwillingness to tolerate defaults and they are imposing tighter lending…(read more)

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