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.