Do the tighten up! At least that is what lenders are doing to residential and commercial real estate lending.
First, let’s look at loan loss reserves for 3 biggest banks. Back to the financial crisis levels of 2008.
According to The July 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices, real estate lending standards are tightening rapidly. The net percent of domestic respondents tightening standards for residential mortgage loans is rising across the board.
On the demand side of residential mortgage lending, we see tepid demand … except for GSE (Government Sponsored Enterprise)-purchased loans.
On the commercial real estate loan side, demand is muted for all types of commercial real estate, especially nonfarm residential.
All this is happening as lenders tighten standards for residential mortgages.
As 30 year mortgage rates hit an all-time low. So, get one while you can!
Covid-related economic shutdowns are ravaging the residential and commercial mortgage markets despite record low interest rates.