* FDIC's Bair questions federal subsidies for homeowners
* Says focus needs to also be directed at rental housing
* Says still long way before crisis is over
WASHINGTON, June 7 U.S. policymakers need to
focus on affordable rental housing, rather than just extend
federal homeownership incentives that benefit a limited number
of Americans, bank regulator Sheila Bair said on Monday.
Bair, chairman of the Federal Deposit Insurance Corp, said
taxpayer subsidies for homeowners are three times the size of
all rental subsidies -- a trend that has over time helped push
housing prices out of the reach of the groups the government is
trying to assist.
"Even as we emerge from this crisis, it is worth asking
whether federal policy is devoting sufficient emphasis to the
expansion of quality, affordable rental housing," Bair said in
remarks to the Housing Association of Non-Profit Developers
Bair has been hailed for her early warnings on the subprime
housing crisis, and fought for dramatic loan modifications during
the financial crisis that has seen millions of Americans' homes
fall into foreclosure.
On Monday, she said the United States needs to "take a hard
look" at housing policies that drove the homeownership rate as
high as 69 percent. She said that level proved unsustainable, and
may never be reached again.
During the subprime mortgage crisis and wider global credit
crunch, U.S. home prices declined by about 33 percent.
Bair said loan modifications are beginning to gain steam,
but that more than 11 million homeowners still owe more on their
homes than they are worth.
"We still have a long way to go until this crisis is behind
us," she said.
The full text of the speech can be found at:
(Reporting by Karey Wutkowski; Editing by Phil Berlowitz)