A conference entitled “Mortgage Foreclosure Policy: Past, Present, and Future” brought together leading practitioners and scholars of the foreclosure crisis at the Federal Reserve Bank of Chicago to highlight national and local efforts to combat foreclosures, engage in critical discussion of the causes of and solutions to the crisis, and develop plans to avoid future foreclosure crises.
Keynote speaker Elizabeth Duke of the Federal Reserve Board of Governors offered attendees an overview of problems that led up to the crisis, the pain felt in today’s housing market, and principles to ensure a healthier market in the future. Governor Duke emphasized the need for implementing adequate consumer protections, increased transparency and simplicity for both mortgage products and the securitization market, and properly aligned incentives for servicers, brokers, and loan officers. Click here for the full text of Governor Duke’s speech.
Judge Annette Rizzo of the Philadelphia County Court of Common Pleas recounted the inspiring preliminary successes of her Residential Mortgage Foreclosure Diversion Pilot Program. The pilot program, which requires all borrowers and lenders in foreclosure cases to develop a mutually agreeable solution with a court appointed mediator, served as inspiration for a recently-funded Cook County court mediation program. Judge Rizzo advised those designing the mediation process in Cook County to pay close attention to local conditions, engage in proactive borrower outreach, and ensure that the program is mandatory for all foreclosure cases.
On the issue of revitalizing communities hurting from foreclosure, local recipients of Neighborhood Stabilization Program (NSP) dollars showed how cooperation and coordination can make resources go a long way. With the help of the Regional Home Ownership Preservation Initiative (RHOPI), municipalities in South and West Cook County pooled their resources to apply for NSP funds to buy and rehabilitate foreclosed properties, instead of competing against each other for the same funding. Robin Snyderman of the Metropolitan Planning Council emphasized that since the foreclosure problem traverses municipal borders, coordinating targeted resources across political boundaries can have a greater impact than individual municipalities working independently.
The dialogue and policy innovations exhibited at “Mortgage Foreclosure Policy: Past, Present, and Future” lay a hopeful foundation for addressing the foreclosure crisis. Continued experimentation and assessment of foreclosure prevention strategies will be necessary to achieve long-lasting reductions in foreclosures and revitalization of communities. The conference was co-sponsored by the Federal Reserve Bank of Chicago, the Chicago Community Trust, NHS of Chicago, MacArthur Foundation, and Woodstock Institute. Conference materials can be found here.