WASHINGTON – March 13, 2007 – The government is monitoring the distress in the subprime mortgage industry and believes the current situation is manageable, a Treasury Department official said Monday.
The comments by Robert Steel, the Treasury undersecretary for domestic finance, came as concern mounted on Wall Street and elsewhere that a blowup of companies that make higher-risk home loans to consumers with poor credit or low incomes could spill over into other industries.
“We monitor the markets all the time, and are hopefully pretty aware of market conditions,” Steel told reporters in response to a question. “It seems to us that the situation is a manageable one, that we’re watching.”
Federal bank regulators, concerned about a spike in delinquencies and defaults on subprime home mortgages, earlier this month called on lenders to exercise caution in making the loans and to strictly evaluate borrowers’ ability to repay them. The regulators said the guidelines, if formally adopted by the agencies and followed by lending institutions, could result in fewer borrowers qualifying for subprime loans.
Tuesday, March 13, 2007
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