The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system.
Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011.
“Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year,” the OCC said in the report.
Banks already cinched standards to historic levels after the housing market collapse in 2007. Fannie Mae, the largest mortgage financier in the U.S. reported an average FICO score of 763 in the first quarter and a loan-to-value ratio of 70% at origination, according to its latest financial filing.
But nearly two-thirds of banks surveyed by OCC left standards unchanged so far in 2012, signaling “there is a slow continued trend from tightening to unchanged standards.”
“This year’s survey showed the continued normal progression toward stable or easing underwriting standards as the economic environment stabilizes,” said John Lyons, chief national bank examiner at the OCC. “Examiners will be focusing on underwriting standards as banks ease standards to improve margins and compete for limited good loans.”