- GE, Vivendi Agree to Value NBCU Stake at $5.8 Billion
- White House to Crank Up Pressure on Mortgage Industry
- Treasury Threatens Banks, Not Borrowers
- Dubai World to Restructure About $26 Billion of Debt
- Cramer: Dubai Can’t Sink These 6 Dividend Stocks
- Bove: 26 Banks May Need To Raise More Capital
- Lesson From Dubai: Start Cutting Risk In Your Portfolio
- Iranian Seizure of British Yacht Pushes Oil Above $77
- The World's Biggest Debtor Nations
- Treasury Threatens Banks, Not Borrowers
- We're Approaching a Market Bubble: Portfolio Manager
- Hershey Shares: What Options Are Saying
- Nov. 30: Unusual Volume Leaders
- Why Careful Shoppers Are Great for the Box Office
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Best Online Retailers to Buy Now: Internet Analyst
- ESPN The Magazine’s Body Issue: A Financial Success
- Cyber Monday: The Last Vestige of Dotcom Hype
MOST SHARED
- Timeless and Time-Tested Warren Buffett Watch Predictions
- Should Homeowners Be Able To Walk Away From Mortgage?
- Goldman Sachs Party Ban: No Gatherings of 12 or More
- Dubai World Set to Restructure About $26 Billion of Total Debt
- Nov. 30: Unusual Volume Leaders
- Bove: 26 Banks May Need To Raise More Capital
- Notre Dame Fires Charlie Weis After 5 Seasons
- Cyber Monday: The Last Vestige of Dotcom Hype
- Oil Demand Sees Year-Over-Year Rise, First Since 2007
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
Text Size 
Federal Reserve Chairman Ben Bernanke on Monday said conditions in mortgage markets remain strained, posing a threat to the economy, and urged steps be taken to prevent home foreclosure where possible.
 |
Mary Altaffer / AP Federal Reserve Chairman Ben Bernanke. |
"High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy," Bernanke said in remarks prepared for delivery to the Columbia University School of Business in New York.
Bernanke said the sharp U.S. housing downturn is producing a steep rise in mortgage delinquencies. Not all foreclosures result in the loss of the home, he said, but the high number of borrowers in distress and sharp declines in home values in regions of the country mean the share of people who lose their homes will be higher in the current situation than in the past.
A widespread decline in home prices is a relatively novel phenomenon, and lenders and loan servicers will have to develop new and flexible strategies to deal with this issue, the Fed chairman said.
Bernanke called on Congress to move quickly on legislation expanding the Federal Housing Administration and strengthening oversight of government-sponsored mortgage finance enterprises Fannie Mae [FNM Loading... ()] and Freddie Mac [FRE Loading... ()].
"Finding ways to avoid preventable foreclosures is a legitimate and important concern of public policy," he said.
Bernanke's comments come as a sharp spike in problem U.S. home loans and a deep correction in U.S. housing markets have led to financial market turmoil and weighed on U.S. economic growth to the point that many analysts believe it is in recession.
A congressional panel last week passed a sweeping bill to enable the government to finance $300 billion in distressed mortgages. Its authors say the measure would help 2 million homeowners avoid foreclosure.
The Bush administration opposes the measure, saying it exposes taxpayers to potentially significant losses if a large share of loans refinanced by the government fail.
Bernanke stopped well short of endorsing the bill in his speech, saying only that Congress should pass a legislation that would give the Federal Housing Administration greater latitude to set underwriting standards and risk-based premiums for mortgage refinancing.
Print
Email
- Ever wished your cab driver would stop chatting and just get to where you're going? Well, that moment is closer than ever.
- UPS is giving its customers the option to offset its carbon emissions when sending a package.
- Romania's presidential campaign has been rocked by a video that may show the president striking a 10-year-old boy.
- Raising alligators is hard work, and the fickle taste of rich consumers has just made it much harder, says the NY Times.
- A recent issue of ESPN Magazine was one of its top sellers ever, and it only took scantily clad athletes to make it happen.
- The continued real estate boom in China is partially fueled by a generational flood of newlyweds.
Data is a real-time snapshot *Data is delayed at least 15 minutes