Consumer Borrowing, Mortgage Demand

(November 8, 2005) --  The Federal Reserve reports a $59.43 million drop in outstanding consumer credit to $2.160 trillion in September, marking the first decline in nearly a year.

Separately, the Federal Reserve polled senior loan officers at banks around the country and found that close to 25 percent recorded weaker mortgage demand during the third quarter. Some of the decrease can be attributed to a dip in refinancing activity.

Over the last two years, numerous banks said they took steps to scale-back lending terms by boosting primary and secondary loan limits, diminishing interest-rate spreads, and/or elevating maximum loan-to-value ratios.