FOMC Chairman, Ben Bernanke provided testimony to the Joint Economic Committee this morning. You can read the transcript by clicking here.
Senator Charles E. Shumer, Chairman of the Joint Economic Committee, Opening Statement is available here.
Q&A from the Committee followed Bernanke’s testimony. Here’s some bits I found interesting:
Senator Robert Bennett from Utah discussed how 15 years ago, the cry from Congress was that credit was not available to the poor and more needed to be done to make home ownership less restrictive. Now the cry is that too much credit became available. He went on to say that large institutions who created these programs are paying the price and they should. As well as people who falsely stated their income to lenders and flippers hoping for “tulip time” by pushing an inflated home price onto another buyer.
“Markets make better decisions than government. Markets will punish. Markets will reward and markets will eventually stabilize”.
The possibility of having conforming loan limits raised was touched on a couple of times during the Q&A. Bernanke stressed that the lift should be temporary and that the Government should consider possibly taking some of the credit risk from Freddie and Fannie for the loans over $417,000.
Bernanke continues to stress (as do I) that home owners need to contact their lender as soon as possible if they have any concerns about not being able to make their mortgage payments. The earlier a lender is contacted, the higher the possibility the home owner will have of being able to work something out with the lender and keep their home.
Fed futures are now betting on the Fed Funds rate being decreased again at the next meeting in December.