Fed: Banks Tightening Subprime Loan Standards

http://www.insidearm.com/news/00004226-fed-banks-tightening-subprime-loan-standa/

After the voluptuous debacle that the deflating of the housing bubble has been, in its wake, banks are being more stringent in its application process. Most cannot afford to be as lackadaisical with lending standards as they were in the heydays of five years ago.

And though banks are tightening subprime loan standards, that doesn’t mean standards are being tightened all around. "Tighter standards on subprime and nontraditional mortgage loans generally were not associated with a move toward more-stringent lending policies for prime mortgages," the Fed said in one of its periodic surveys of senior loan officers.

Banks are also reporting a decrease in the number of mortgage loans being requested.

The data comes from a Federal Reserve survey, which drew responses from 53 domestic and 20 foreign banks.