Bernanke Comments: Tighter Lending Standards Hurts Housing
Federal Reserve Chairman Ben Bernanke was speaking at the Operation HOPE Global Financial Dignity Summit in Atlanta, Georgia today. His speech was titled "Challenges in Housing and Mortgage Markets" and the focus was on the housing sector.
Bernanke said, "For the first time in a number of years, the housing sector is improving, adding to growth and jobs. But the housing revival still faces significant obstacles, and the benefits of that revival remain quite uneven. Strengthening and broadening the housing recovery remain a critical challenge for policymakers, lenders, and community leaders. The degree to which that challenge is met will help determine the strength and sustainability of the economic recovery and the extent to which its benefits are broadly felt."
Bernanke went on tos say that while the decline of willing and qualified potential homebuyers explains some of the contraction in mortgage lending, he believes that tight credit is an important factor as well. He even said that lenders have cited a variety of concerns: worries about the economy, outlook for house prices, existing real estate loan exposures, servicing costs, and the put-back risk of mortgages.
Bernanke's FULL SPEECH is here.
JON C. OGG
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