WASHINGTON — Despite some encouraging economic signs, a clear majority of bankers surveyed by the Federal Reserve Board do not expect underwriting standards for residential real estate, commercial mortgages or credit cards to normalize before 2011.

In the central bank's survey of 55 senior loan officers at domestic institutions, some said it could take even longer for standards to return to the levels that prevailed before the crisis hit. Four in 10 bankers told the Fed that underwriting standards for even investment-grade commercial mortgages would not normalize for "the foreseeable future." Another 20% said that such a recovery would not happen for at least two years.

Such pessimism was evident across loan categories. A little more than 41% of respondents could not predict when standards for prime borrowers seeking residential mortgages would return to normal, and 32% said the same for credit card borrowers. More than 12% of officers said it would take until 2011 for residential mortgage standards to normalize; 25% said the same about credit card loans.

Despite talk of a recovery already underway on Wall Street, Monday's survey results crystallized warnings from Fed Chairman Ben Bernanke that a return to normal levels of growth will take several years to achieve.

Fed policymakers "generally expect that, after declining in the first half of this year, output will increase slightly over the remainder of 2009," he told Congress last month. "The recovery is expected to be gradual in 2010, with some acceleration in activity in 2011."

For companies with below investment-grade ratings, the situation is more grim. More than half of the loan officers — 53.1% — said their benchmarks for approving commercial mortgages for these companies would remain unusually stringent in coming years. And 28.6% said this lending would return to normal by 2011.

On the consumer front, 18.8% of lenders said their standards for home loans to prime borrowers would ease by 2011, and another quarter said it would take longer.

For nonprime borrowers seeking home loans, 57.7% of the bank officers said they did not see a return to normal standards for the foreseeable future, and 15.4% said some recovery could occur in two years. Weaker borrowers will also face an uphill battle in coming years to get a credit card, according to two-thirds of the respondents; 11.1% said standards could ease by 2011.

Banks continue to tighten standards across the board as they clamp down on risk. In commercial and industrial lending, 35.2% of respondents said they had tightened standards for large and middle-market companies. Most financial institutions said they did this by widening the spread between the loan rate and their company's cost of funds or charging premiums on loans perceived as riskier. The situation was much the same at companies with annual sales of less than $50 million. More than one-third — 35.8% — of the bank officers said they tightened standards on these businesses during the past three months, mostly by widening spreads and charging premiums.

Half of the respondents said they toughened their stance on C&I loans because of the economic outlook. None of the banks said they curbed lending because of their capital position, and just one, unidentified institution said its liquidity problems were "very important" to its decision to pull back.

With such turmoil in the C&I sector, more than half of the loan officers said demand for loans weakened in the past three months from large- and middle-market companies. More than 60% said demand was weaker from smaller companies, and an additional 7.5% said it was "substantially weaker." Most of the bankers said the drop in demand stemmed from lower funding needs for commercial and industrial businesses or deteriorating credit quality at those companies.

Commercial real estate continues to suffer, with 46.3% of lenders saying they tightened standards on applications for such loans in the preceding three months. Demand for CRE loans is also off, according to 70.3% of the loan officers.

Credit standards on prime residential mortgages were stricter during the past three months, according to 21.5% of respondents, and a majority — 78.4% — said standards have basically flat-lined.

Still, with low interest rates prevailing, demand for prime mortgages strengthened in the past three months, according to 39.2% of officers. Another 37.3% said demand had not changed dramatically, and 23.5% said interest in such loans is declining.

Approvals of nontraditional residential mortgages are predictably tougher, with 45.8% of loan officers reporting a tightening. Not a single banker reported easing the rules on these loans, and demand was off, according to 29.2% of the respondents.

Revolving home equity lines of credit, which consumers used to fuel the recent boom, continue to be shunned by banks. Nearly 36% said standards for approving home equity lines have strengthened. Demand for these loans was off, according to 28.3% of the officers. Another 15.1% said it was rebounding.

Most bankers — 86% — said their willingness to make consumer installment loans had not changed in recent months, though 10% said they were less interested in making such loans.

The story differs when it comes to credit cards. More than 35% of the bankers said they tightened these standards, and 64.7% said they went untouched over the past three months.

Most of the cards that do exist have seen some form of change, largely when it comes to credit limits, according to half of the respondents. Others said they continued to widen spreads or increase the minimum credit score needed to keep a card. Just one banker said his institution was forcing credit card customers to repay more of their outstanding balance each month.

On consumer loans other than credit cards, many respondents (34%) said they were increasing the minimum required credit score, and 30% increased the minimum down payment. Nearly 31% said demand for all consumer loans was down.

Loans that were most likely to see a credit reduction included credit for financial firms (48.7%), consumer credit cards (48.5%) and commercial construction lines of credit (42.8%).

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