For most single-family lending programs, credit standards at banks were little changed during the second quarter. While demand for residential loans was up at a good share of banks, it was also down at a good share.
In its July 2018 Senior Loan Officer Opinion Survey on Bank Lending Practices, the Federal Reserve Board reported that 23 percent of large banks eased standards on loans considered eligible for the government-sponsored enterprises.
At the same time, demand for GSE-eligible mortgages increased at 23 percent of large banks
— those with at least $20 billion in domestic assets — while it fell a 29 percent of non-large banks.
Participating in the survey were 72 domestic banks and 22 U.S. branches and agencies of foreign banks.
But on government mortgages, QM loans, non-QM loans as well as on jumbo loans, non-jumbo mortgages and home-equity lines of credit — standards remained mostly the same.
Demand for government mortgages was down at more than a fifth of all banks.
Even though demand was up at 15 percent of banks for QM non-jumbo non-GSE mortgages, it was down at 28 percent.
A fifth of large banks reported stronger demand for QM jumbo mortgages, though more than a fifth of all banks said demand weakened.
Eleven percent of banks had stronger demand for non-QM jumbo loans, while a fifth had weaker demand.
On non-QM non-jumbo loans, demand sank by nearly a quarter among all banks. Still, more than 14 percent of smaller banks experienced increased demand.
No change in credit conditions was noted for the six banks that make subprime mortgages. Demand for subprime loans was down at one smaller bank.
Changes to credit conditions for commercial real estate loans was also little moved.
“On balance, banks reportedly kept CRE lending standards about unchanged,” the report stated. “However, a modest net share of domestic banks reported that they tightened lending standards on loans secured by multifamily residential properties.
Sixteen percent of large banks experienced a decline in demand for commercial mortgages, though 11 percent saw stronger demand.
And although 22 percent of large banks reported weaker demand for multifamily loans, another 13 percent saw an improvement.
Demand was weaker at a quarter of large banks for construction-and-land-development loan.
