To further expand on the news from yesterday, Federal Reserve chairman Bernanke told listeners Friday in Chicago that the Federal Reserve does not anticipate more widespread injury from the growing number of home foreclosures. Recently, discussion has broken out with camps on either side of the lending debate. Some politicians, such as Senator Schumer from New York, belief unfair lending practices are at the root of the skyrocketing defaults. He cites ambiguous or unclear language as a major factor in unsuspecting victims finding themselves up against huge interest rates. However, Bernanke represents an alternate, if not completely opposing viewpoint, stating that increased regulations on lenders will only serve to further weaken the housing market. Bernanke’s contention is that subprime loans, for the most part, have continued to perform as expected and only a small fraction of them have resulted in default. Legislation is pending in both houses of Congress, and most pundits agree the foreclosure rate has not yet peaked, so it remains to be seen who will be proven right.
Chairman Bernanke Speaks On Foreclosures
