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However, 50 percent of the respondents said there was a lack of demand

for such loans and 40 percent said there was a limited number of

mortgage applicants at their bank who meet the Fannie Mae and Freddie

Mac underwriting criteria for conforming jumbo loans, which require

better credit scores and higher down payments.

The Fed survey also revealed that both domestic and foreign banks

expected to continue tightening standards on most loans through the

end of 2008 and into 2009.

"We think the Fed might have to be tightening by the end of this year,

so higher interest rates coupled with higher credit standards is not a

pretty picture," said Kim Rupert, managing director of Action

Economics LLC in San Francisco.

(Reporting by David Lawder Editing by Neil Stempleman

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