The Fed just released its July survey of Senior Loan Officers (charts below) and, to no real surprise, fewer banks report tightening standards and the number of banks reporting a drop in loan demand is slowing. Of course just because banks are set with their current tight lending standards doesn't mean loans are being made. This is especially true for commercial real estate, where demand continues to shrink. The best news is in housing, where I have been forecasting a rise in home prices into year-end. At the end of last year almost 80% of banks were tightening lending standards for prime mortgages and now that level is down to 20%. Borrowers have responded -- 20% of banks report an increase in demand for prime residential mortgage loans. Small but needed steps to recovery.