Home-Loan Demand Is Weak, According to a Lender Survey
May 09, 2011
WASHINGTON -- Demand for home mortgages weakened at many banks in recent months, a Federal Reserve survey of senior loan officers found. The quarterly survey also found that many banks tightened standards for consumer loans. Credit-card terms, especially credit limits, were tightened by many banks, while a few banks tightened terms on other consumer loans as well. Still, the Fed survey found no clear trend for loan demand, calling it ``mixed across all loan types.'' It said several banks reported higher demand for commercial and industrial loans, while a few saw increased demand for commercial real-estate loans. In consumer installment debt, the number of banks reporting weaker demand was equal to the number that saw a pickup. A significant number of banks eased terms on commercial and industrial loans, the survey found. Many banks told the Fed they have been charging off consumer loans at a higher-than-expected rate, citing a rise in bankruptcies that occur with a shorter-than-usual intervening period of delinquency.
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