Mortgage finance volumes bounced back in February, a rare piece of good news for an Australian economy drowning in negativity.On flip-side, ABS data on lending finance for the month was a severe, 11 per cent drop in business credit flows, seasonally adjusted, suggesting the property slump and crashing consumer confidence have fully infected the economy. Business lending volumes are the lowest since November 2017.It's an outcome of the business sector's subdued response to their customers' black mood. The most recent monitor from DBM Consultants recorded that "the financial confidence of both the general public and business has been declining sharply since the second half of the calendar year 2018.  "During the first half of 2018, the two groups had been slightly at odds. By the second half of 2018, both businesses and consumers together suffered a continuous decline, with businesses starting the slide." DBM surveyed 80,000 people and firms for this work.Housing finance approvals across owner occupier and investor segments lifted by 2.7 per cent, seasonally adjusted, in February over January, though the monthly reading was still around 19 per cent below the level a year before.In "a starker and more surprising turnaround", as Westpac economist Matthew Hassan labelled things yesterday, "the value of investor loans increased by almost one per cent in February, following average monthly declines of 3.6 per cent over the previous six months. "The monthly value of loans to this segment is still down heavily, by 29 per cent, over the last year," Hassan said.Richard Fennell, head of consumer banking at Bendigo Bank, told Banking Day "that would have to be demand led rather than supply led ... we've not seen any great upturn."Westpac's Hassan outlined a couple of theories to explain this monthly diversion from trend."The detail around average loan sizes suggests a clear lift over the last two months after a sharp fall through the second half of 2018. That may be an indication that the effect of tightening borrower assessments may be easing ... also evident across both bank and non-bank lending flows."Some of the effects of tightening credit conditions may also be dissipating."Mark Genovese, CEO of Unity Bank, questioned any suggestion the big banks operating in a post-Royal Commission haze may have resorted to looser credit standards or aggressive home loan sales targets, as were once the norm."A lot of the mutual bank sector are growing above system, including us," Genovese said."Big banks are being a lot less flexible still. I have a sense they've taken away the emphasis on growth."