Banks Now Holding — Not Selling — Mortgages They Originate
Chefs that eat their own cooking tend to gain weight. So do banks.
According to the Federal Reserve, total assets at U.S. commercial banks swelled to more than $11 trillion in early April, up from $10 trillion a year ago. Last month, the growth rate of bank assets hit its fastest growth pace in 28 years (“The Future of Banking: Big, Cautious”; The Wall Street Journal, 4/18/08).
What does that mean for the housing market? Higher lending standards, which translate into tighter credit. To quote my earlier post,”when you have to eat your own cooking, you tend to pay closer attention to the ingredients.”