The following appeared on page 2C of the Tuesday May 6, 2008 issue of the St. Paul Pioneer Press.
[My comments: Congress intervening in the market is exactly what GOT us into this mess in the first place. Congress mandated that certain demographic groups get loans regardless of their ability to pay. Mortgage lenders, meanwhile, loosened their standards to comply with the law. Now look at us! This Congressional/governmental intrusion into the private market has to stop.]
Bernanke: Congress must act to end mortgage crisis
A rising tide of late mortgage payments and home foreclosures poses considerable dangers to the national economy, Federal Reserve Chairman Ben Bernanke warned anew Monday as he urged Congress to take additional steps to alleviate the problems.
"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 a dinner speech to Columbia Business School in New York. "Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest," he said.
Some 1.5 million U.S. homes entered into the foreclosure process last year, up 53 percent from 2006, Bernanke said. The rate of new foreclosures looks likely to be even higher this year, he said.
To provide more relief, Bernanke again called on Congress to give the Federal Housing Administration, which insures mortgages, more flexibility to help distressed borrowers at risk of losing their homes.