The ranks of federally chartered banks making subprime mortgage loans didn't shrink during the second quarter, but most tightened their standards, and demand for such loans did not grow. A Federal Reserve survey of senior loan officers at 50 banks found that 16 were still making subprime mortgage loans -- the same number reported during a survey in April. The 16 banks, which also made other types of mortgage loans, accounted for 57 percent of all residential real estate loans on the books of commercial banks as of March 31. Nine of the 16 banks making subprime loans, or 56 percent, said they tightened their credit standards. One in four banks making subprime loans tightened their standards "considerably." About 44 percent of the banks said their standards on subprime loans remained basically unchanged, and none reported easing standards. On June 29, regulators finalized new guidance for federally chartered banks offering subprime loans. The guidance instructs banks to quali...
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