There is a "pressing need" for more policy measures to address the problems in the U.S. housing sector, Federal Reserve Governor Elizabeth Duke said on Wednesday.
Speaking in New York, Duke said foreclosures are likely to stay "extremely elevated" as she called for stronger anti-foreclosure efforts.
"As long as uncertainty exists as to the scope and terms of the additional steps that likely will be offered, borrowers, lenders, and servicers will continue to hold out in hope of securing a better deal," Duke said. "In this case, the cost of delay could easily outweigh the differences in outcome between the proposals."
She said public support is needed for housing finance until private credit and securitization markets are restarted.
"Such efforts are not only in the interest of the affected families and their communities but also in the interest of the financial institutions involved and the broader economy," she said.
By Stephen Huebl and edited by Sarah Sussman
©CEP News Ltd. 2009