An index compiled by the MortgageBankers Association suggests lenders have begun to tightenstandards for housing finance loans as they prepare to implementnew qualifiedmortgage regulations.

The MBA's Mortgage Credit Availability Index draws on data fromthe AllRegs Market Clarity product. A decline in the MCAI indicatesthat lending standards are tightening, while increases in the indexare indicative of a loosening of credit, the MBA said.

According to the Association, the Index slid 0.7% to 111.5 inAugust, the first time it moved down after four consecutive monthsof increases. The MBA set the MCAI to 100 in March 2012 andreported, by way of comparison, that if had been in existence in2007 it would have had a value of around 800.

The MBA attributed the drop to less availability of someinterest only mortgages as well as lower availability of housingfinance loans with terms of more than 30 years. In addition,shifting borrower eligibility requirements on jumbo loans helpedlower the MCAI, the association said.

“The slight decline in the MCAI in August reflected a reductionin the availability of certain loan features, particularlyinterest-only and terms exceeding 30 years,” said Mike Fratantoni,MBA's vice president of research and economics.

“As these loan features are outside of the qualified mortgage(QM) definition, these changes may reflect the beginning of QMimplementation, and the fact that Fannie Mae and Freddie Mac arelimited to acquiring loans that meet the QM definition,” Fratantonisaid.

The MBA said that several factors related to borrowereligibility for housing finance loans go into calculating the MCAI,including credit score, loan type, loan-to-value ratio amongothers.