Mortgage lenders are unlikely to loosen credit or expand their servicing and origination capacities until Washington policymakers make key decisions about the future of the nation’s housing finance system, according to Federal Reserve governor Elizabeth Duke.
Duke told a Realtors meeting Tuesday that lenders are nearly as capacity constrained today as they were during the 2003 refinancing boom, even though current loan volume is about one-third of that record year.
Uncertainties surrounding the qualified mortgage rule, servicing standards, the future of Fannie Mae and Freddie Mac, and other pending issues are factors in lenders and servicers delaying needed infrastructure investments, the Fed governor said.
“I am suggesting today that policymakers move forward with the difficult decisions that will affect the future of the mortgage market,” Duke said at the National Association of Realtors’ midyear Washington conference.
“Until these tough decisions are made, uncertainties will continue to hinder access to credit, the evolution of the mortgage finance system and the ultimate recovery of the housing market,” she said.
