Fed Finds Few Signs of Easing on Mortgage Credit
Once again, a Federal Reserve Board survey found that banks are continuing to maintain tight underwriting standards with respect to single-family loans.
In a January survey of loan officers, “banks reported that standards for both prime and nontraditional mortgages were essentially unchanged over the past three months,” according to the results released Monday afternoon. The previous LO survey was in October.
Just three of the 65 domestic banks in the survey indicated some easing on prime loans and one bank “tightened somewhat.”
The Fed survey picked up 34 banks that originate nontraditional mortgages, such as alt-A and interest-only loans. Only one of the nontraditional lenders indicated any change and that bank tightened its lending standards “somewhat.”
While lending standards remain tight, demand for prime loans increased since October. But demand for nontraditional loans and home equity lines of credit was “essentially unchanged,” the Fed said.
“About 50% of domestic banks expect the delinquency and charge-offs rates on prime and nontraditional residential real estate loan to improve in 2013,” the Fed report says.