PrintFederal_Reserve_Senior_Loan_Officers_Frist_Qtr_09.pdf
Even though demand is up, home buyers will find it tougher to get a mortgage today than last fall, even if they qualify for a prime mortgage.
According to the Federal Reserve’s quarterly survey of senior loan officers, half the nation’s lenders report they have tightened lending standards on prime mortgages over the previous three months
Nontraditional loans like ARMs also are getting tighter scrutiny. About 65 percent of the 25 banks participating in the survey originating nontraditional residential mortgages also have tightened their lending standards.
Demand was clearly up during the first quarter. About 35 percent of lenders saw stronger demand for prime residential mortgages, a substantial change from the roughly 10 percent that reported weaker demand in the fourth quarter of 2008. Demand for nontraditional loans was also up. Only about 10 percent reported weaker demand for nontraditional mortgage loans-a substantially lower proportion than last fall.
About 50 percent of lenders-down from roughly 60 percent in January-reported that they had tightened their lending standards for revolving home equity lines of credit (HELOCs) over the previous three months. Regarding demand, about 30 percent of domestic banks, on net, reported weaker demand for HELOCs over the previous three months, slightly more than in January.
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