Results are in from the October 2007 Senior Loan Officer Opinion Survey on Bank Lending Practices, in which bank managers from 52 domestic and 20 foreign banks were asked about current trends in the lending business.
Here’s a summary of the stats published by the Federal Reserve:
Over the past three months (compared to the previous three), both the supply of and demand for loans to businesses and households has decreased. Most banks interviewed have begun using stricter standards on residential home mortgages, including prime mortgages, subprime mortgages and nontraditional mortgages.
The same applies for consumer loans, with the exception of credit card loans.
Standards for credit card loans have shown little change over the past three months.
The Federal Reserve suggests that a lowered tolerance for risk on the part of lenders and investors, stemming from losses from investments in the failing subprime real estate market, has played a role in these changes.
The stricter lending standards used by most of the banks surveyed include an increased minimum credit score required to make loans, and a decreased number of loans offered to those who do not meet credit score requirements.
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