The Chairwoman of the nation's top banking, FDIC, said that Tuesday that the foreclosure prevention mechanism is falling behind in stopping the foreclosure crisis and that there is a need to step up efforts. FDIC Chair Sheila Blair, speaking before an audience at a Fortune 500 Forum in Washington, D.C. she said that "We're definitely behind the curve, and we fall further behind the curve every day,"
She said that the nation's financial system would be in much better condition today if the lenders responsibly acted on the her earlier warnings about loan modifications. In October last year, she already told lenders that they should modify at-risk mortgages so borrowers could afford to stay in their homes.
Bair began sounding the alarm more than two years ago, warning that lenders had to shore up capital reserves to offset non-performing loans.
Meanwhile the mortgage mess has ballooned, expanding beyond the housing market into the entire financial sector and the overall economy.
Both the government and the banking industry have tried to negate the mortgage meltdown.
She told the Fortune 500 Forum that it's not too late to step up foreclosure prevention initiatives.
"The sooner we do it the better," she replied. "I see higher delinquencies growing through 2010."
Acting now would help many families who would otherwise lose their homes. And that would benefit everyone.
"Attacking the financial problem at its roots is the fiscally responsible and smart thing to do," she said.
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