Banks in the US are easing lending policies and relaxing mortgage loan standards for commercial and industrial firms, following less demand for home loans among consumers, according to a survey by Federal Reserve.
The survey of senior loan officers, which was conducted by the central bank from 1-15 October 2013, was based on responses from 73 domestic banks and 22 foreign banks operating in the US.
According to the survey, banks eased their lending policies for commercial real-estate loans, as well as standards on prime residential mortgage loans in the third quarter of this year.
The survey also found that, among different types of loans, banks reported weaker demand for prime and non-traditional mortgage loans, while little change in demand for business loans.
IHS Global Insight senior US economist Erik Johnson said easier credit conditions, more generally, are helping the economic recovery, but what is concerning is that lending standards for residential mortgages have not improved much since tightening dramatically during the crisis.
According to the survey, all the banks had dropped mortgage refinancing and many lenders reduced the processing time for home-purchase loan application and increased the marketing of such loans.