Bernanke Sees Signs of Recovery from Foreclosed Homes

The nationwide crisis of real estate foreclosure houses may be nearing its end, according to Federal Reserve Chairman Ben Bernanke who testified in Congress on Tuesday about the state of the economy. Bernanke said that the recession would end in 2009 as long as the credit markets sustain improvements in lending and as long as price declines for homes, including foreclosed homes, continue bottoming out. In March, the Fed Chairman compared the rate of the country's recovery to green shoots, but on Tuesday, he confidently talked about elements coming together to drive recovery. Nevertheless, he admitted that economic growth would be slow and that the unemployment rate will continue to rise. He also described results from the stress tests for the country's 19 largest banks as reflections of the banks' financial positions. He said those banks needing more buffer money should obtain additional funding from private sources. He pointed out that President Obama's administration is not expecting to ask for more bailout funding from Congress. He reiterated the importance of the gradual revamp of the financial sector, which many housing analysts blame as the cause of the subprime crisis that started the avalanche of foreclosed homes. In the past weeks, stock indexes rallied, with the S&P 500 index rising by 35 percent from its lowest level in March. The stock resurgence is being seen by economists as a sign that consumer spending is stabilizing and that the harsh effects of foreclosed homes are declining. The Fed decreased benchmark overnight rates to nearly zero in December, and last week, it reiterated it would try to hold interest rates at a low level for a longer period to help push economic recovery. He also assured legislators that the Fed will soon release more detailed information on how it spent the bailout money, including financial companies which were given loans and the collaterals that were used. Bernanke said he is cognizant of the Fed's obligation to be transparent to the public and Congress about how tax money is being used by the agency, including how it is using the money to solve the problem of foreclosed homes. The Fed bailout issue has been a source of controversy after the Fed provided billions of loans to banking firms and other financial companies which have not previously asked financial help from the Fed and after many of those bailed-out banks refused to modify loans to help cut down the number of foreclosed homes. Search foreclosed homes by city:

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