Since the direction of the housing market is now largely determinate on bank underwriting practices, and this is a fairly abstract thing, unlike mortgage rates, I like to look at this report from the Fed called (released at 2pm today) Senior Loan Officer Opinion Survey on Bank Lending Practices.

The message seems to be that bank underwriting hasn’t gotten any tighter over the past several months, but it is still constrained.

Residential mortgage loan demand (prime) has done better than other types of lending.

In the July survey, domestic banks indicated that they continued to tighten standards and terms over the past three months on all major types of loans to businesses and households, although the net percentages of banks that tightened declined compared with the April survey.2 Demand for loans continued to weaken across all major categories except for prime residential mortgages.

And fewer have tightened underwriting standards further:

The net fraction of domestic banks that reported tightening their lending standards on home equity lines of credit fell to roughly 30 percent, from 50 percent in the April survey

2 Responses to “July 2009 Senior Loan Officer Opinion Survey on Bank Lending Practices”

  1. Edd Gillespie says:

    That must indicate unemployment is coming down.

  2. Edd Gillespie says:


    Welcome back. I’ve had to harass other bloggers who solicit comments. I’ve been reading Jim Harrison’s econ blog. I think he just may be able to see the forest notwithstanding the trees. Some of these guys are comparing outsourcing to the migration of farmers to the city during the past century. NOT SO. Outsourcing sort of resembled two day lemming leap to the sea when compared to the pace of displacing farmers. Our workers could not adjust fast enough to catch up with this one. Oh well, look at it as a game; you loose some, you win some.
    I’m hearing the term de-globalization and some economists are trying to explain why that is different from protectionism. Remember when Greenspan used to explain these things. Maybe he was the original quant.