New Summary: Bernanke says tight lending hurting

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Associated Press

Posted on November 15, 2012 at 7:36 PM

HOME MORTGAGES: Federal Reserve Chairman Ben Bernanke said Thursday that overly tight lending standards by some banks may be holding back the U.S. economy by preventing creditworthy borrowers from buying homes.

TIGHT STANDARDS: Bernanke said in a speech that credit standards needed to be tightened after the 2008 financial crisis, which was caused in part by lax mortgage lending. But he said the "pendulum has swung too far the other way" and now banks are preventing qualified borrowers from getting loans.

OUTLOOK: Bernanke said housing has shown some signs of recovery this year but that much more improvement is needed because construction, sales and home prices all remain below the levels before the housing crisis hit.

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