Congress Is Urged to Limit Response to Mortgage Crisis

Investor's Business Daily (09/21/07) P. A1; Higgins, SeanIn testimony before the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke said federal regulators and the financial markets are handling problems in the subprime mortgage sector and urged Congress to consider legislation only to revamp the Federal Housing Administration. Bernanke opposes allowing Fannie Mae and Freddie Mac to purchase bigger loans--except on a temporary basis--because he believes it would imply that the entities have government backing. The economist, who was joined by HUD Secretary Alphonso Jackson and Treasury Secretary Henry Paulson at the hearing, said lenders should work with borrowers to modify mortgages and minimize foreclosures. However, House Financial Services Committee Chairman Barney Frank, D-Mass., insisted that the subprime crisis could have been avoided if the government had imposed stricter regulations. Mortgage Bankers Association Chairman John Robbins, CMB, noted in prepared remarks that "today's market is the toughest environment I have ever seen."