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Treasury Releases Lending Survey

The ""Treasury Department"":http://www.treasury.gov released its February ""lending survey"":http://www.financialstability.gov/docs/surveys/monthly_lending_intermediation_snapshot_041509.pdf on Wednesday. The study covers the top 21 institutions who have received a government investment through the Capital Purchase Program (CAP).
The survey shows that overall lending levels remained relatively steady, with February originations down only two percent from January. Nine of the 21 banks studied posted increases in lending. Twelve banks reported declines.
But within this overall picture, lending levels varied by category, and residential mortgage originations showed significant improvements. Home loans increased by a healthy 35 percent. Of the 18 banks that are active in the residential mortgage business, 16 experienced an increase in originations, while only two banks, Citigroup and Capital One, saw a decline in home loan originated.
The increase in mortgage originations was mainly the result of refinances, which were up 42 percent from January. Home equity lines of credit (HELOC) also rose, with a median increase of 18 percent.
According to the Treasury, ""February data point to a bright spot in the housing lending, but illustrate the continued negative impact of the economic downturn and financial crisis on credit markets and on the demand for loans by consumers and businesses.""
The Treasury that the steady overall lending levels and increases in mortgage loans would have most likely been significantly lower absent the capital provided by the government, and said this is a strong indication of the ""critical role this program has played in stabilizing markets and restoring the flow of credit to consumers and business."" So far, the Treasury has provided aid to 547 banks, ranging from the nation's largest lenders to smaller community-based institutions.
The government is planning to spread its investments to a broader range of institutions. Earlier this week, the Treasury released guidelines for ""mutual banks"":http://www.financialstability.gov/docs/CPP/Final%20CPP%20Mutual%20Bank%20FAQs.pdf to apply for CAP funding, and last week issued terms for ""mutual holding companies"":http://www.financialstability.gov/docs/CPP/MHC_faqs.pdf to also receive capital injections from the government.
To see the Treasury's lending and intermediation snapshot from its February lending survey, ""click here"":http://www.financialstability.gov/docs/surveys/monthly_lending_intermediation_snapshot_041509.pdf. To access the reports of the individual banks included in the study, ""click here"":http://www.financialstability.gov/docs/surveys/survey_submissions_0209.pdf.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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