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Reducing Foreclosures is Fed Chair's Goal
Federal Reserve Chairman Ben Bernanke Tuesday called for stronger measures to reduce rising foreclosures.

"Reducing the rate of preventable foreclosures would promote economic stability for households, neighborhoods, and the nation as a whole," Bernanke said. "Although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done," the Fed chief said.

Bernanke suggested that lenders provide relief to struggling borrowers by reducing the amount owed when borrowers are underwater. He acknowledged that this might be a hard sell to bankers, but he maintained that it could work in the long run. "Measures that lead to a sustainable outcome are to be preferred to temporary palliatives, which may only put off foreclosure and perhaps increase its ultimate costs," Bernanke said.

Source: The Associated Press, Jeannine Aversa (03/04/2008)