The credit market remains under stress, Ben Bernanke points out today in is testimony before Congress. The New York Times points out that credit market stress is affecting a variety of markets:
Mr. Bernanke also cited strains in a range of credit markets, including those for corporate debt, municipal bonds, student loans and government-backed mortgages, but added that he was “confident in our economy’s long-term prospects.”
For many interested in buying a home, this also presents unique challenges. In spite of all that has been done to kick start lending, many financial institutions remain wary of extending credit -- and that includes for home mortgage loans.
Perhaps when the economy picks back up again, we will have learned our lesson. Perhaps when the major banks start lending again, they will remain vigilant. Even though some of the current mortgage loan approval restrictions have been overkill, some overall tightening was needed anyway.
The real question, after we get through all this mess, is this: Have we learned anything?
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