In its October survey of senior lending officers, the Federal Reserve Bank notes that borrowing requirements have been relaxed for business lending and some consumer lending in the past three months. Home mortgage loans, however, have experienced no change in requirements over the past three months.
Regarding commercial real estate lending, the Fed noted:
On balance, a small fraction of domestic respondents to the October survey reported that standards on CRE [commercial real estate] loans had eased over the previous three months. The fraction of banks that reported a strengthening of demand for CRE loans increased notably, moving to about 45 percent on net.
On home mortgage lending, the Fed said:
Banks’ residential real estate lending standards reportedly remained about unchanged over the past three months. As in each of the previous three surveys this year, respondents reported little change in their standards for prime mortgages. In the October survey, standards on nontraditional mortgages were reportedly unchanged, in contrast to the tightening reported earlier in the year.
And on consumer lending in general:
As in the July survey, domestic banks reported that they had eased standards on credit card and auto loans over the past three months, while standards on other consumer loans had remained about unchanged. On balance, banks reported that most terms on all types of consumer loans were about unchanged over the past three months. Demand for credit card and auto loans reportedly increased, on balance, while it was about unchanged on other types of consumer loans.
The short version is that banks are willing to lend for auto purchases because those are relatively short-term loans, and they’re willing to loosen credit card standards because interest rates remain relatively high for consumers who borrow on their credit cards. Lending requirements for student loans has also been eased.
But 30-year mortgages are attractive to banks only when the borrower is gold-plated:
Two-thirds of banks reported that their bank was about as likely to approve an application for an FHA mortgage from a borrower with a FICO score of 660 as they were in 2006.
The Fed’s October survey report is available here.