Federal Reserve Chairman Ben Bernanke said on Friday that the U.S. central bank would use the full measure of its ability to help alleviate the housing crisis.
As credit and housing market turmoil continue to do damage to the U.S. economy Bernanke made the comments at the annual meeting of the National Community Reinvestment Coalition, a group of community-based organizations.
[The Fed] is strongly committed to fully employing our authority, expertise, and resources to help alleviate their distress, Bernanke said, referring to consumers and communities and the effects of rising home foreclosures and delinquencies.
Bernanke added that it was using its capacities other than that of a regulator such as its strength in research, data analysis, its regional presence and contacts with community groups, lenders, policymakers and others.
The remarks come as the nation faces an economy which is on the verge of recession, or already in one according to some economists.
In his comments, Bernanke reiterated some of the previously announced proposals by the Fed to help stem lending practices which have affected so-called 'subprime' borrowers, those with poor credit histories.
Far too much of the lending in recent years was neither responsible nor prudent, Bernanke said.
He said the terms of contracts for subprime borrowers have let homebuyers and investors purchase properties beyond their means.
In addition, abusive, unfair or deceptive lending practices led some borrowers into mortgages that they would not have chosen knowingly.