Bernanke Plugs More Help for US Homeowners

Fed chief outlines ideas for public, private sector to slow foreclosures
By Drew Nelles,  Newser Staff
Posted Dec 4, 2008 4:54 PM CST
Estela Jimenz, right, and other supporters of Acorn, the Association of Community Organizations for Reform Now, protest outside a home under foreclosure in South San Francisco, Nov. 25, 2008.   (AP Photo)
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(Newser) – Ben Bernanke says more must be done to halt record US home-foreclosure rates, the New York Times reports. The Federal Reserve chief suggested several options today, including the government buying bad mortgages en masse and refinancing them through a government-insured program, and strengthening a scheme aimed at lowering homeowners’ monthly payments.

“Steps that stabilize the housing market will help stabilize the economy as well,” Bernanke said. One idea would see the government share losses with lenders if borrowers default again, while another underused refinancing program could get a boost by lowering mortgage rates. Thanks to the burst housing bubble, Bernanke added that foreclosures are expected to reach 2.5 million this year, from about 1 million normally.