Skip navigation
Watchlist Sponsored By :
Economy Video Gallery
Management Today released its list of top 35 businesswomen under 35 years old. The backgrounds range from entrepreneurs ...
As the global economic slowdown and ongoing financial crisis continues to take their toll on financial hubs New York and...
After Apple released its first iPhone, many other mobile-phone makers introduced internet-viable models. Keith Woolcock,...

Current DateTime: 11:09:45 05 Jul 2009
LinksList Documentid: 24355697
  • Collection of Michael Jackson

      Earlier this year, Jackson sought to auction his personal items. Although it never came through, here's a look at what was almost sold.

  • Recession-Resistant US Cities

      Some cities have been hit much harder than others during the recession. Here are the metro areas faring the best.

  • How Much For A T-Bone Steak?

      From the cost of a T-bone steak to a monthly phone bill, the price for everyday items can vary dramatically across the country.


Current DateTime: 11:09:45 05 Jul 2009
LinksList Documentid: 24890560
  • Boom, Bust and Blame

      The inside story of the economic crisis that has gripped the entire world.

  • E3: Gaming's Cutting Edge

      North America's premier computer and video game trade show draws tens of thousands of professionals to experience the future of interactive entertainment.

  • The Fall of GM

      A look into the fall of General Motors as the automaker heads toward bankruptcy and an effective nationalization.

By: Reuters | 16 May 2008 | 11:09 AM ET
Text Size

The head of the Federal Deposit Insurance Corp said on Friday that another wave of U.S. credit stress was coming, involving non-mortgage loans.

Sheila Bair, in remarks prepared for a Brookings Institution event, said delinquency rates were rising for construction and development lending as well as for commercial and consumer debt.

However, she said U.S. banks are still healthy and in a much stronger position to weather the storm than they were during the savings and loan crisis of the 1980s.

"Data show there could be a second wave of the more traditional credit stress you see in an economic slowdown," Bair said.

"The slowdown we've seen in the U.S. economy since late last year appears to be directly linked to the housing crisis and the self-reinforcing cycle of defaults and foreclosures, putting more downward pressure on the housing market and leading to yet more defaults and foreclosures."

Bair lauded efforts by Democrats and some Republicans in Congress to draft a bill offering federal mortgage assistance but said "more proactive intervention" is needed to prevent home foreclosures.

Bair called for using low-cost government loans to help borrowers pay down unaffordable mortgages, a plan she put forward last month as a way to help about 1 million homeowners.

"Over the past year, federal and state governments, and consumer groups have worked with some success to encourage the industry to modify loans," Bair said.

"But it's just not happening fast enough.

Given the scale of the problem, this cannot go on loan-by-loan as it has." The FDIC insures deposits at more than 8,000 U.S. banks and thrifts and oversees the soundness of the institutions.

Earlier on Friday, the Commerce Department reported construction starts on new U.S. homes rose by a surprisingly strong 8.2 percent in April and applications for new building permits turned up for the first time in five months.

New-home building has been hit hard by a wave of foreclosures for existing homes and big inventories of unsold homes.

Democrats and Republicans on the Senate Banking Committee on Thursday reached a deal for a broad housing rescue plan that would offer $300 billion in refinancing for distressed mortgages, according to housing industry sources.

Copyright 2009 Reuters. Click for restrictions.
Tools:
Print EmailAdd This share icon


Current DateTime: 01:04:45 05 Jul 2009
LinksList Documentid: 29778428

Current DateTime: 01:15:33 05 Jul 2009
LinksList Documentid: 29779196

Current DateTime: 01:15:41 05 Jul 2009
LinksList Documentid: 29779199

Current DateTime: 01:15:33 05 Jul 2009
LinksList Documentid: 29779198
CNBCCNBC
About CNBC  |  Site Map  |  Privacy Policy  |  Terms of Service  |  Video Reprints  |  Advertise  |  Help  |  Contact
Partners: AOL Money  |  BloggingStocks.com
CNBC is a Division of NBC Universal
  Data is a real-time snapshot *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
Thomson ReutersThomson Reuters