Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Fed’s Duke Says Mortgage Policy May Impede Credit Access

May 9 (Bloomberg) -- Federal Reserve Governor Elizabeth Duke said new mortgage regulation may inhibit lending to borrowers with low credit scores even amid a rebound in the housing market.

“The housing market is improving, but mortgage credit conditions remain quite tight for borrowers with lower credit scores,” Duke said today in a speech in Washington. “New mortgage regulations will provide important protections to borrowers but may also lead to a permanent increase in the cost of originating loans to borrowers with lower credit scores.”

Policy makers have tried to correct lax lending standards that helped pump up a bubble in home prices which burst last decade, leading to the worst recession since the Great Depression. The Fed will consider the impact of new rules on the availability of credit, Duke said.

Lenders may be unsure of the conditions in which they will have to repurchase loans sold to government-sponsored mortgage finance companies, Duke said. Mortgage servicing standards have become tighter as a result of recent settlements, she said.

“A sustained recovery in the housing market appears to be under way,” the Fed governor said. “Although I expect housing demand to expand along with the economic recovery, if credit is hard to get, much of that demand may be channeled into rental, rather than owner-occupied, housing.”

To contact the reporter on this story: Aki Ito in San Francisco at aito16@bloomberg.net.

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net NI HOM NI TRE NI MOR NI CEN NI FED NI USECO NI BON NI FRX NI INTERNET NI MARKETS NI ECO NI INF NI LABOR NI BNK NI FIN

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.