A nominee for the Federal Reserve Board of Governors suggested Tuesday the central bank could increase its supervisory role on real estate owned properties.

Jeremy Stein, in response to a housing-related question in a Senate committee hearing, said the market is more so in congressional jurisdiction, but more policy on REO could be "in the Fed's bailiwick."

The Harvard University economics professor said it'd be important not to create impediments to "proper market adjustment." Fed Chairman Ben Bernanke called for a nationwide REO-to-rental program in a paper published earlier this year.

Lowered interest rates, a common recessionary Fed tactic, aren't having the intended effect on opportunities to refinance for homeowners, Stein said. Many homeowners with high loan-to-value ratios simply can't take advantage of low rates.

"Typically when the Fed eases monetary policy, that's quite helpful," Stein said. "That has been a more difficult process this time around."

A second Fed board nominee, former Treasury official Jerome "Jay" Powell, said any "silver bullet" to solve housing problems would have been used by now, but called private capital ventures in REO a good step.

A Senate aide said a committee vote could come as early as the end of next week for Stein and Powell, along with three other administration nominees.

Andrew Scoggin