Bernanke says the Fed will investigate lender documentation
Federal Reserve Chairman Ben Bernanke speaks at New York University Law School during an economic policy forum on April 11, 2007 in New York City.
TEXT OF INTERVIEW
JEREMY HOBSON: Now to the analysis of Greg McBride, a financial analyst with Bankrate-dot-com. He joins us live.
GREG MCBRIDE: Good morning Jeremy.
HOBSON: Bank of America is resuming foreclosures this week, even though they've now admitted to problems in some paperwork. And also this morning, we've heard from the Fed Chairman Ben Bernanke that the Fed is going going to look into whether lenders cut corners on documentation. What do you make of these developments?
MCBRIDE: Well the Federal Reserve is the primary regular for banks. So it's no surprise that they're going to be a little more engaged in this process. And as far as the foreclosures and restarting them, there's an inevitability to all of this. The average period of time that these home owners have gone without making payments is a year and a half and in some cases two years. So a lot of these properties are just going to end up in foreclosure eventually.
HOBSON: And Greg, we also heard from Mr. Bernanke about the housing market in general. Here's what he said.
BERNANKE: Now more than 20 percent of borrowers owe more than their home is worth with housing markets still weak, high levels of mortgage distress may well persist for some time to come.
HOBSON: And we are just moments away from data on existing home sales. Where do we stand on the housing market recovery at this point?
MCBRIDE: We've got a long way to go unfortunately. There's a big imbalance between supply and demand that's going to take a long period of time -- several years -- to work through and delaying foreclosures only prolongs that pain.
HOBSON: The mess continues. Greg McBride of Bankrate.com, thanks so much.
MCBRIDE: Thank you Jeremy.