Yesterday, Ben Bernanke testified before Congress. And he told those members of Congress that they need to fix the mortgage markets in order to get us out of this mess. MarketWatch reports on Bernanke's comments:
"Going forward, for the housing market to recover, it would be helpful for the mortgage markets to be working more effectively and more efficiently," Bernanke said.
Um, isn't that efficiency sort of why we have a problem right now? Were't the mortgage markets a little too efficient in handing out money to people who maybe shouldn't be borrowing it?
Perhaps what the mortgage markets need is a total overhaul. Maybe what they need are clear-cut lending rules and requirements to verify income. Maybe mortgage markets need to make sure that the people they lend money to can make the payments after their mortgage loans reset.
It may not boost liquidity and "confidence" in the short term, but it would lead to a more stable market in the future.
(Image credit: US government)
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