Federal Reserve chairman says delinquencies and foreclosures are likely to rise, and home prices will fall further.
Mortgage delinquencies and foreclosures will continue to rise for a while longer and further declines in house prices are likely, Federal Reserve Chairman Ben Bernanke said Tuesday.
In a speech to the nation's community bankers, Bernanke said the imbalance between supply and demand for homes on the market will continue to eat into prices, which in turn will lead to additional reductions in homeowner's equity. He said the reset of adjustable rate mortgages higher will also contribute to the problem.
Bernanke detailed a number of steps being taken to limit home foreclosures, including counseling and adjustments of loan rates. But he concluded his speech by saying that "although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done."
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