Treasury Releases February Monthly Bank Lending Survey

Posted by Orb Staff on April 16, 2009 No Comments
Categories : Residential Mortgage

S. Department of the Treasury has released results from its monthly bank lending survey for February with data from the top 21 recipients of government investment through the Capital Purchase Program (CPP). February data point to a bright spot in housing lending but illustrate the continued negative impact of the economic downturn and financial crisis on credit markets and on the demand for loans by consumers and businesses. Banks extended approximately the same level of loan originations in February as in January. The Treasury suggests that the steady overall lending levels observed in February likely would have been lower absent the capital provided by Treasury through the CPP – an indication of the critical role this program has played in stabilizing markets and restoring the flow of credit to consumers and business. Banks have been extending credit to homeowners and have enabled them to access affordable loans and reduce their borrowing costs, as reflected in the median increase in residential mortgage originations across the 21 banks by a healthy 3%. The increase in mortgage origination volume in February mainly consisted of the refinancing of existing mortgages. The median change in mortgage refinancing was an increase of 42% from January survey results to the February 2009 results. Similarly, home-equity origination increased in February due to seasonal factors, such as spring remodeling efforts or other home-related projects. The median percentage change in home equity originations was an increase of 18%. Survey results for commercial real estate lending over this same period were not as bright and generally reflected the poor conditions in the commercial real estate markets, the commercial mortgage-backed securities (CMBS) markets, as well as the cautious outlook by businesses. Renewals of existing accounts increased due to the lack of liquidity in the CMBS market, while new loan commitments by banks decreased from January to February 2009, the Treasury says. The median percent change in renewals of existing loan accounts in February was an increase of 4%. The median percent change in new commitments was a decrease of 23%. The Treasury has also posted its [u][link=http://financialstability.gov/docs/surveys/monthly_lending_intermediation_snapshot_041509.pdf]Monthly Lending and Intermediation Snapshot[/link][/u] and a [u][link=http://financialstability.gov/docs/surveys/monthly_lending_intermediation_snapshot_041509.pdf ]report[/link][/u] detailing individual bank reports. SOURCE: T

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