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We must cut foreclosures, says Bernanke, as mortgage rates fall

Staff Report • Dec 5, 2008 at 12:00 AM

USA Today is reporting that Federal Reserve Chairman Ben Bernanke on Thursday urged the government to consider aggressive and unprecedented steps to slow the pace of foreclosures that is imperiling the housing market and the economy.

Bernanke, speaking at a Fed housing conference, pressed for a number of new programs, such as the outright purchase and refinancing of troubled mortgages. He warned that lenders may initiate more than 2.25 million foreclosures in 2008, up from an average annual pace of less than 1 million before the housing crisis hit. In addition, up to 20% of homeowners may owe more on their homes than they are currently worth.

"Despite good-faith efforts by both the private and public sectors, the foreclosure rate remains too high," Bernanke said. "More needs to be done."

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