The housing market has slumped in recent months
A government plan for major banks to return mortgage lending to 2007 levels is just a broad aspiration, says the Council of Mortgage Lenders (CML).
The government wants RBS and Lloyds TSB to boost lending to house buyers and small businesses as a condition of its injection of £37bn into the banks.
Earlier, the CML said the plan seemed not to be "prudent or desirable" and called for clarification.
The CML now welcomes the proposal, but confusion still surrounds its terms.
Some £20bn of taxpayers' cash is likely to be pumped into RBS, with a further £17bn to be put into HBOS and Lloyds TSB.
This would give the government a significant stake in the banks, and the government has attached some conditions to this investment.
These include "maintaining, over the next three years, the availability and active marketing of competitively-priced lending to homeowners and to small businesses at 2007 levels".
The CML said it wanted clarification of what exactly was meant by this. Initally it said it doubted whether, given the current market, it would be prudent or desirable to return to 2007 lending volumes.
But later, after discussions with the Treasury, it welcomed the aspirational view of a market where "credit-worthy borrowers" have access to a good spread of mortgage products as they did a year ago.
"Lenders have been working hard to continue to deliver a flow of competitive mortgages into the market, as well as to ensure that as many people as possible are able to keep their homes if they suffer temporary financial difficulties," said CML director general Michael Coogan.
While the government was suggesting conditions in a bid to stimulate the mortgage market, nationalised Northern Rock announced it was not passing all of last week's cut in interest rates to mortgage holders.
"This has all the more significance due to the fact that they are providing no new products for existing borrowers," said David Hollingworth, of London and Country Mortgages.
"Those with very little or no equity effectively have nowhere else to go and failing to pass on the full Bank rate cut will hit those borrowers that need the cut the most."
The lender said its standard variable rate (SVR) would be cut by 0.15 of a percentage point to 7.34% from 1 November for existing borrowers.
The Bank of England's Monetary Policy Committee cut the Bank rate by half a percentage point to 4.5% in a surprise move last Wednesday.
Ten lenders including Halifax, Lloyds TSB, the Woolwich, First Direct, Royal Bank of Scotland and NatWest all said they were reducing their SVR by half a percentage point shortly after the cut.