A quarterly survey of bank risk professionals for FICO, conducted by the Professional Risk Managers' International Assn., reported that bankers expect delinquencies on consumers loans to rise, underwriting standards to become stricter and the housing sector to continue struggling in the future. These reports coincide with the message delivered by National Assn. of Realtors President Ron Phipps that housing should be kept first on the nation's public policy agenda because a housing recovery is essential to its well-being.

“Housing has been an enormous drag on the economy for over 3 years as U.S. households lost trillions of dollars in equity,” said Andrew Jennings, chief analytics officer at FICO and head of FICO Labs. “While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation. This puts the devastation of the housing crash into perspective.”

FICO's survey reported that 49 percent of respondents said that housing prices would not rise back to 2007 levels before the year 2020. Also, 73 percent of bankers believed mortgage defaults would remain elevated for 5 more years at least.