OCC survey finds bank underwriting standards tightenMortgagePress.comOCC, underwriting, 14th Annual Survey of Credit Underwriting Practices
The Office of the Comptroller of the Currency has released its
14th Annual Survey of Credit Underwriting Practices and reported
that commercial and retail underwriting standards tightened after
four consecutive years of eased underwriting standards.
The 2008 survey included examiner observations and assessments
of credit underwriting standards at the largest national banks. The
survey reflected that the disruption in financial markets that
began in 2007 led to an abrupt change in risk appetite of the
majority of the banks and a renewed focus on fundamental credit
principles by bank lenders.
Examiner assessments found that risk in both the commercial and
retail portfolios increased over the past year and they expect
portfolio risk to continue to increase over the coming year. Key
factors that contributed to the rise in product and portfolio
credit risk were the weakening economy, rising energy costs,
turbulence in the secondary credit markets, the downturn in the
housing market, and the anticipated impact of relaxed underwriting
standards over the past few years on payment performance.
The 2008 survey included the 62 largest national banks and
covered the 12-month period ending March 31, 2008. The aggregate
total of loans was $3.7 trillion, which represented over 83 percent
of all outstanding loans in the national banking system.
For more information, visit www.occ.gov.