UPDATE 1-Banks tighten U.S. mortgage terms - Fed survey

WASHINGTON, Aug 13 (Reuters) - Large banks further tightened credit on subprime and non-traditional mortgages and took a more cautious tone towards prime mortgages, syndicated loans and commercial real estate loans in recent months, a Federal Reserve survey showed on Monday.

The Fed's July survey of senior loan officers showed that more than 30 percent of domestic banks tightened standards on subprime and non-traditional mortgages, while 14 percent tightened standards on prime residential mortgages.

About one fourth of the 53 domestic banks surveyed and 40 percent of the 20 foreign institutions polled said they had tightened lending standards on commercial real estate loans in the past three months, the Fed said. At the same time, the Fed survey found that while a small fraction of banks tightened credit standards on commercial and industrial loans, one third of respondents said they had eased terms, including cutting loan spreads over their cost of funds. Banks that eased terms in the July survey "pointed to more aggressive competition from other banks and non-bank lenders as the most important reason for having done so," the Fed said in the survey.

The poll included a special section on the syndicated loan market, which found that both foreign and domestic banks expect a tightening of credit standards and terms for syndicated loans in coming months, "in part because of a very large number of deals in the pipeline."

((Reporting by David Lawder, editing by Neil Stempleman; Reuters Messaging: david.lawder.reuters.com@reuters.net; Email: david.lawder@reuters.com; +1 202 898 8395)) Keywords: USA FED/LOANS

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