If consumer confidence is the top reason why the housing market has been so slow to recover, then banks' reluctance to lend ranks a close second.

Speaking Friday at a finance conference hosted by the Consumer Federation of America, Dave Stevens, the president of the Mortgage Bankers Association, said the combination of low home prices and rock-bottom interest rates has made home ownership more affordable now than at any time in history. Yet home sales remain sluggish because many lenders are so spooked by proposed new regulations aimed at protecting consumers that they are lending to only the most qualified borrowers or staying on the sidelines entirely.

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