Credit clampdown
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In case you were still wondering if the credit crunch is real: A quarterly Federal Reserve survey of senior loan officers found that getting any type of mortgage became tougher during the third quarter.
The survey, conducted in October and released today, tallied up responses from 55 U.S. banks, the large majority of which reported they had tightened their lending standards.
Tightening by category: 70% for prime loans, 90% for nontraditional mortgages and 100% for subprime home loans at the four banks that said they were still writing mortgages for people with poor credit scores. (The nontraditional category includes such products as adjustable-rate mortgages with multiple payment options, interest-only loans, mortgages with limited income verification and loans on properties not occupied by the owners.)
Sinking housing prices took a toll on the availability of home equity lines of credity as well. About 75% of the banks reported having made it harder for borrowers to qualify for revolving HELOCs over the past three months.
About 85% of domestic banks also reported tightening lending standards for commercial real estate loans.
Of course, mortgages were only part of the picture -- nearly 60% of the responding banks told the Fed they had imposed tighter standards on credit card loans, and nearly 65% indicated they made other consumer loans harder to get over the past three months.
-- E. Scott Reckard
