National banks should approach further easing of their underwriting standards on residential and home equity loans with "caution," according to the Office of the Comptroller of the Currency.An annual OCC survey discovered that 27% of national banks eased their credit standards on HELs and only 11% tightened them over the past 12 months. On residential loans, 22% eased while only 5% tightened their underwriting standards. "While performance remains sound, banks should be wary of the unseasoned nature of many of these portfolios and approach further easing with caution," Deputy Comptroller Barbara Grunkemeyer said. The OCC's Survey of Credit Underwriting Practices reports that the easing in bank retail lending was concentrated in HEL and first-mortgage loans. "Notably, this is the first time in the survey's 11-year history that examiners reported net easing of retail underwriting standards," the survey says.

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