Mortgage Crisis To Continue

by Darren

If you were worried that the mortgage crisis was coming to an end, fear not. Fed Chairman Ben Bernanke is embracing for a long one. Bernanke spoke to a group of mortgage industry professionals in Orlando, Florida. He urged them to do more to prevent a larger crisis.

“Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods and the nation as a whole,” Bernanke said. “Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done.”

Bernanke mentioned a few proposals that are unlikely to sit well with the mortgage industry, including urging them to write-down equity, and to reduce the amount of loans.

“Principal reductions that restore some equity for the homeowner may be a relatively more effective means of avoiding delinquency and foreclosure,” he continued.

So far, the mortgage industry has not done much to instill confidence in their ability to recover from such a huge crisis.