Small numbers of domestic banks responded to the Federal Reserve's January survey of senior loan officers with indications that they have eased their credit standards across major loan categories over the last three months.  Domestic banks reported that demand for business loans, prime residential mortgages and auto loans had increased while demand for other types of loans was essentially unchanged.   U.S. branches and agencies of foreign reported little change in their lending standards but a net increase in demand.

Sixty-five banks, almost evenly divided between large banks (those with total domestic assets of $20 billion or more) and other banks responded to the survey question about prime mortgages.  The majority, 92 percent of large banks and 88 percent of other banks, reported that their standards for writing a prime residential loan were virtually unchanged since the last survey.  Only one large bank reported lending had tightened "somewhat;" four banks or 6 percent said their standards for prime loans had eased to some degree.

Demand for these prime loans for home purchase was reported as about the same by 61.5 percent of respondents - 20 large and 20 other banks.  Three banks (4.6 percent) reported moderately weaker demand and 19 banks (29.2 percent) said demand was moderately stronger.  Three banks said that demand for prime loans was substantially stronger.

All but one of thirty-four banks that responded to a question about their standards for nontraditional mortgages said that those standards were essentially unchanged.  The remaining bank said its standards had tightened somewhat.

The demand for nontraditional residential mortgages was unchanged at 25 banks or 71.4 percent.  The remaining ten (one more bank responded to the demand question than to the one on standards) were divided equally between those reporting moderately weaker and moderately stronger demand.

Only five banks said they had done any subprime lending and four reported standards that were basically unchanged while one said its standards had tightened somewhat.  All five said that demand for subprime mortgages had stayed about the same.

Sixty-six banks responded to questions about revolving home equity lines of credit.  Fifty-nine or 89.4 percent reported their lending standards were basically unchanged while three reported somewhat tighter standards and four somewhat eased standards.  Demand was moderately stronger in the eyes of seven banks or 10.6 percent and moderately weaker according to 13 or 19.7 percent.  Demand was unchanged for 45 of the banks or 68.2 percent.

The January survey contained a set of special questions on respondents' expectations for loan quality in 2013, questions that have been repeated annually since 2006. Overall, large fractions of domestic banks, on net, expected improvements in delinquency and charge-off rates during 2013 for most loan categories included in the survey, assuming that economic activity progresses in line with consensus forecasts. Moreover, expectations for improvement in most loan categories were about the same as the corresponding net fractions from a year ago.

About 50 percent of domestic banks expect the delinquency and charge-off rates on prime and nontraditional residential real estate loans to improve in 2013, on net, about the same fractions reported in last year's survey. Expectations for improvements this year in the quality of HELOCs stayed roughly the same as last year, with about one-third of the respondents anticipating an improvement in the quality of such loans.

Here's a link to the full report.