The Federal Reserve today reported that, according to a survey of banks, there has been little change in the standards applied to applicants for conventional mortgages even as the subprime market tanked. The survey was taken among banks, not unregulated lenders. SEE FULL REPORT

In a report, the Fed said, "A large majority of respondents indicated that standards on prime residential mortgages had remained basically unchanged over the past three months, with 15 percent reporting somewhat tighter standards. Of the forty-four domestic institutions that originated nontraditional residential mortgages, 45 percent noted a tightening of standards on such loans, whereas the rest reported that their standards had remained basically unchanged. Similarly, of the sixteen institutions that indicated that they had originated subprime residential mortgages, more than half of respondents, on net, reported that they had tightened standards on such loans.

"Tighter standards on subprime and nontraditional mortgage loans generally were not associated with a move toward more-stringent lending policies for prime mortgages. Indeed, of the nine institutions that reported having tightened standards on subprime residential mortgages, only one indicated that it had also tightened standards on prime residential mortgages. Five of the twenty institutions that reported tightening standards on nontraditional mortgages also tightened standards on prime mortgages.

"On net, about one-fifth of domestic institutions indicated that they had seen weaker demand for each of the three categories of residential mortgages--prime, nontraditional, and subprime--over the past three months."