Industry News

Survey reveals rising tide of tighter standards for prime loans

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About 41 percent of loan officers responding to a Federal Reserve Board survey in October reported they had tightened lending standards on prime residential mortgages during the previous three months, compared with 15 percent of respondents in a July survey. About 36.7 percent of the 49 respondents stated that credit standards "tightened somewhat" for prime residential loans, while 4.1 percent stated that credit standards "tightened considerably" during that period. The October 2007 Senior Loan Officer Opinion Survey on Bank Lending Practices also revealed that about 22.5 percent of the 40 banks that originated nontraditional residential loans reported that lending standards tightened considerably for those loans during the three months prior to the survey, with 37.5 percent reporting some tightening and the remaining 40 percent reporting that lending standards remained basically unchanged. That compares with a total of 40 percent of respondents that reported tightening du...