The chairman of the Federal Reserve this week sought to calm fears in financial circles about the economic impact of the continuing subprime market collapse.
In a speech given in Chicago, Ben Bernanke said the Federal Reserve is examining ways to scale back on roughshod tactics by mortgage lenders, which has helped contribute to the continuing crisis. But he also stressed that the fallout will not significantly impact the American economy overall.
"We do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system," Bernanke said. He said in answer to a question that he believed the financial system would be able to absorb the losses from the subprime mortgage loans that go bad without major difficulties, according to Reuters.
While Bernanke tried to allay financial power brokers and analysts this week, more and more families are facing a fiscal crunch because of mounting problems in the subprime mortgage market. Those seeking relief may want to explore the Federal Housing Administration, whose government-backed loans can help people climb out from the stranglehold of the subprime market.
To learn more about FHA loans and how they can help financially distressed homeowners, visit FHA section or contact one of our loan or refinancing specialists today.