Banks Ease Guidelines on Prime Home Loans
By Franklin Rhodes •
August 17th, 2010
A small fraction of banks eased their credit standards on prime home loans over the past three months, according to a July survey of senior loan officers by the Federal Reserve Board. Of the 57 banks surveyed, loan officers from five large banks said they “eased somewhat” and two smaller banks said they tightened somewhat. Home mortgage loan guidelines have been extremely tight over the last few years, so this is a good sign.
The survey also found a slight pickup in demand for residential home mortgages since April, particularly for non-traditional mortgage loans. The senior loan respondents noted no change in underwriting standards for commercial real estate mortgages and little change in demand. “Overall, the net fraction of banks that reported that demand for CRE loans had deceased continued to be small,” the Fed said.
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