Is the mortgage industry stuck in a rut? Fed chair Ben Bernanke seems to think so. Amid promises that the Fed will step in with rate cuts if the situation warrants it, Bernanke is also offering advice to the mortgage industry. He insists that mortgage products should be developed in a wider range with options designed to help those with lower incomes, and those working to refinance. MarketWatch reports on some of the products Bernanke suggests could help the mortgage industry:

"Such products could be designed to avoid or mitigate the risk of
payment shock and to be more transparent with respect to their terms,"
Bernanke wrote. "They might also contain features to improve
affordability, such as variable maturities or shared-appreciation
provisions for example."

This is interesting. He’s not just arguing for changing standards or better practices. He’s talking about including a range of financial vehicles into the mortgage industry to make it more workable for a wider variety of people. "Get creative!" he says.

However, if the mortgage industry feels that they can get away with continuing their ways, waiting for the Fed to ride in on a white charger to save them, such suggestions will probably go unheeded.