US FED: Rosengren Supports Expanded FHA Mortgage Lending

Some FED officials such as Eric Rosengren are backing proposals to expand the scope of lending programs such as FHA in an attempt to stablize the housing market throughout the US:

‘Making these programs more accessible to borrowers and banks would help ensure that low and moderate income borrowers can obtain financing, which should help stabilize the market for lower-priced homes,’ Rosengren said in comments this evening before the Massachusetts Mortgage Bankers Association.

‘Since many banks have been raising their minimum credit score to qualify for mortgages, the FHA may be able to provide loans for borrowers whose credit history is not up to current thresholds, yet have the capacity to make payments,’ he added.

He also recommended that Fannie Mae and Freddie Mac work to provide a secondary market for mortgages that reflect the lower costs of funds in many credit markets. ‘Further exploration of the GSEs options for pricing and programs may result in additional support to the mortgage market,’ Rosengren said.