TheMReport — News and strategies for the evolving mortgage marketplace.
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SECONDARY MARKET ANALYTICS SERVICING ORIGINATION THE LATEST ORIGINATION reported tightening lending stan- dards for nontraditional residen- tial loans in the second quarter compared with 11.5 percent who reported tightening standards for similar loans in the first quarter. The net percentage tightening ported easing standards on other types of lending: standards was far lower than it had been immediately after the onset of the recession when a net 52.9 percent of loan officers reported tightening standards on traditional residential loans and 84.2 percent reported tightening standards on nontraditional loans. The loan officers surveyed re- » A net 9.5 percent said they were easing standards on com- mercial and industrial (C&I) loans to large and middle- market firms in the second quarter compared with a net 6.9 percent in the first quarter. » A net 4.9 percent said they were easing standards on C&I to small firms in the second quarter; a net 1.8 percent re- ported easing standards in the second quarter. Banks Ease Lending Terms to Meet Demand A comprehensive study from the Fed indicates that standards for mortgage loans relaxed somewhat during the second quarter. C demand in the second quarter, the Federal Reserve reported in its quarterly survey of bank lending standards. And, at the same time, a ommercial banks eased standards for residential mortgage loans to meet a sharp increase in separate Federal Reserve Report indicates the total amount of residential mortgage loans on commercial bank balance sheets dropped $1.65 billion in the same period to $1.57 trillion. 40 | THE M REPORT survey, a net 52.5 percent of bank officers responding to the Senior Loan Officer Opinion Survey re- ported increased demand for tradi- tional mortgage loans in the second quarter, compared with a net 30.2 percent reporting stronger demand in the first quarter when residential loans on commercial bank balance sheets rose $44.4 billion. According to the survey According to the quarterly though, an equal percentage of banks reported easing and tightening lending standards a net 37 percent of respondents said demand for nontraditional residential mortgage loans was increasing compared with the first quarter when 23.1 percent of respondents said demand for nontraditional residential mort- gage loans was increasing. The loans officers' survey said a net 11.1 percent of respondents compared with the first quarter when a net 1.9 percent of survey respondents reported tightening loan standards. Also, according to the survey, » A net 7.9 percent of loan of- ficers said demand for loans by large and middle-market firms increased in the second quarter compared with 31 per- cent of lenders who reported increasing demand in the first quarter. An equal percent- age of loan officers reported increasing and decreasing demand from small firms in the second quarter compared with a net 21.8 percent who reported stronger demand in the first quarter. » A net 10.9 percent of banks responding said they were easing standards on credit card loans in the second quarter, almost unchanged from the 11.6 percent who said the same thing in the first quarter. A net 11.1 percent of banks reported stronger demand for credit card loans in the second quarter compared with 17.5 percent in the first quarter. » A net 22.8 percent of respon- dents said they eased standards for auto loans in the second quarter with a net 33.3 percent