... in some areas, especially mortgage lending, credit conditions remain tight.  Since its peak, home mortgage credit has contracted about 13 percent and many factors are working against a quick turn-around. These include the slow recovery of the economy and housing market, continued uncertainty about Fannie Mae and Freddie Mac, the lack of a healthy private-label securitization market, and cautious attitudes by lenders. 

While commercial and industrial lending has been rising sharply, domestic banks are picking up European bank customers and auto lending is strong, mortgage lending remains sluggish because of tight lending standards and terms.  A return to pre-crisis lending standards wouldn't be appropriate but the current standards may be hampering lending to many creditworthy borrowers.   This may also be impacting some small business lending where borrowers would typically refinance their homes for funding or use the house for collateral for a business loan.

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