WASHINGTON - The Federal Deposit Insurance Corp. on Monday released its twice-yearly semi-annual report on loan underwriting practices reportMonday, which notes slight increases in two risky practices in construction lending.
According to the report, the proportion of banks commonly funding or deferring interest payments on construction loans crept up to 14% and of those making speculative construction loans to 25%.
Of banks active in home-equity lending, the report noted a slightly larger proportion of loans that pushed mortgage indebtedness above 90% of collateral value.
The report also raisesd concerns over the 31% of banks that saw a "moderate" increase and the 2% that showed a "sharp" increase in the level of carryover debt from agricultural loans. While both these percentages are down from the previous report, FDIC Chairman Donna Tanoue said the decline is largely a result of "record government payments to farmers and additional emergency assistance in 1999, and not to improvements in agricultural markets."
Editor's Note: Each link opens a new browser window. We have no control over the content or availability of sites not part of American Banker Online.