Fed Official Cites Additional Pain for Housing

Housingwire reports that while Federal Reserve Bank of Boston President Eric Rosengren believes recent data show a recovery is finally taking root, he doesn’t expect the housing market to spur economic growth. “In many areas of the country, the impaired balance sheets of borrowers, high foreclosures and high vacancy rates imply a long time before local housing markets normalize,” Rosengren said at the New England Mortgage Expo last week. “Given what has happened to housing prices and unemployment, lenders are presumably more cautious in lending. Far fewer loans are going to borrowers with credit scores below 625, and many more purchase loans are going to borrowers with credit scores above 750. In 2006, about 15 percent of the purchase loans were to borrowers with credit scores below 625, but by 2010, this fraction had fallen to only 3.5 percent.”
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