Federal Reserve’s Survey Reports Are Banks Tightening Mortgage Standards
The Federal Reserve released it’s April 2008 Senior Loan Officer Opinion Survey on Bank Lending Practices which reports lending standards at U.S. banks are increasingly stringent.
Majorities of domestic respondents reported that they had tightened their lending standards on prime, nontraditional, and subprime residential mortgages over the past three months. About 60 percent of domestic respondents—a somewhat larger fraction than in the January survey—indicated that they had tightened their lending standards on prime mortgages. Of the 37 banks that originated nontraditional residential mortgage loans, about 75 percent—a somewhat smaller fraction than in the January survey—reported a tightening of their lending standards on such loans over the past three months. Finally, 7 of the 9 banks that originated subprime mortgage loans—a somewhat higher proportion than in the January survey—indicated that they had tightened their lending standards on such loans.