More banks tighten lending standards
. WASHINGTON — More banks are tightening lending standards on home mortgages and other consumer and business loans as a deepening...
The Associated Press Writer
WASHINGTON — More banks are tightening lending standards on home mortgages and other consumer and business loans as a deepening credit crisis exerts a heavier toll on the economy.
The Federal Reserve said today that the percentage of banks reporting tighter lending standards rose across various loan types in its July survey. In April, the central bank had found that the percentage of banks reporting tighter lending standards was already near historic highs.
The new survey, conducted early last month, found that about 75 percent of the banks surveyed indicated they had tightened their lending standards for prime mortgages. That was up from about 60 percent in the previous survey.
The Fed's July survey covered 50 banks that hold about 80 percent of the residential mortgages on the books of all commercial banks.
Out of this group of 50 banks, 32 said they were still originating so-called nontraditional home mortgages. Among these 32 banks, about 85 percent said they had tightened their lending standards, up from 75 percent who said they were tightening lending standards for nontraditional mortgages in the April survey.
The Fed defines nontraditional mortgages as interest-only loans and "Alt-A" mortgages that required limited verification of income.
The survey found that many banks had reported tightening their lending standards and terms on all major categories of consumer and business loans over the past three months.
About 65 percent of domestic banks — more than double the roughly 30 percent in the April survey — reported that they had tightened lending standards on credit-card loans.
Copyright © 2008 The Seattle Times Company
UPDATE - 09:46 AM
Exxon Mobil wins ruling in Alaska oil spill case
UPDATE - 09:32 AM
Bank stocks push indexes higher; oil prices dip
UPDATE - 08:04 AM
Ford CEO Mulally gets $56.5M in stock award
UPDATE - 07:54 AM
Underwater mortgages rise as home prices fall
NEW - 09:43 AM
Warner Bros. to offer movie rentals on Facebook