Federal Reserve Chairman Ben Bernanke has said that housing market reform still remains unfinished business despite recent efforts to overhaul the financial industry, according to the Wall Street Journal.
“We have to get our housing finance system back into working order,” Bernanke said, speaking at a House Financial Services Committee hearing.”It would be helpful if we could begin to get some clarity about that.”
Bernanke said that the housing market could recover with major changes, though the cost of mortgages will most likely rise as the government steps back, withdrawing subsidies from Fannie Mae and Freddie Mac.
“That is a consequence of taking away a subsidy that turned out to be very costly,” he said.
As previously reported, some experts are championing the return of private investment as a means to curb the government’s role. Obama administration officials are pushing to increase fees to lenders and reduce the maximum loan size eligible for government backing. Those limits are set for a minor decline in September. [WSJ]