Welcome!




Expand Your Education with These Courses from
BPOs: The Agent's Role in the Valuation Process.
Bundle 1: CIPS Core Course (US Version).
Bundle 2: CIPS Elective Courses (Non-US Version).
Bundle 2: CIPS Elective Courses (US Version).
Bundle 3: CIPS Institute (Non-US Version).

Healthy Housing Sector Critical to Overall Economy and Sustainable Economic Recovery

Have a comment on this article? Share on Facebook!

By Ruth Mantell

RISMEDIA, November 2, 2010—(MCT)—Children could be prevented from realizing their potential in school and eventually in the labor force as consequences from home foreclosures endure for years, a Federal Reserve official said recently.

“A foreclosure is likely to mean not only a loss of home, but also a disruption in where, or whether, kids are in school,” said Eric Rosengren, president of the Federal Reserve Bank of Boston, at a Fed conference in Washington about neighborhood stabilization. “Since foreclosure is often related to unemployment, marital stress, or physical ailments, the foreclosure is likely to make it difficult for even the most determined student to excel.”

Rosengren added that he is encouraging staff to look at how children are affected by foreclosures.

Foreclosures may be a symptom of “broader problems” having effects on neighborhoods, such as high rates of unemployment and property crime, Rosengren said. He noted that higher foreclosure rates could exacerbate such problems.

“My own view is that too little focus has been on community problems because the focus has been more targeted to housing and foreclosures,” Rosengren said.

Areas with high concentrations of real estate owned properties—properties held on the books of banks typically after failing to sell at foreclosure auctions—have also been associated with greater incidence of babies with low birth weight, higher high school dropout rates and more frequent failures on statewide math tests.

States and the federal government may need to examine how to address the broader problems in these communities, Rosengren said, including “potentially looking at revenue sharing that provides a flexible way to address the fiscal gap faced by many of our hard-pressed communities.”

Also speaking at the neighborhood stabilization event, Sandra Pianalto, president of the Cleveland Fed, said “decades of progress” have been wiped away in the past few years in many low-income communities.

“The longer properties remain vacant, the more collateral damage is done to property values nearby, and it doesn’t take long for neighborhoods to suffer from increased crime, arson and blight,” Pianalto said.

“In our region, mortgage delinquencies led to a high number of foreclosures, which led to an oversupply of housing, which led to home prices depreciating and borrowers and financial institutions taking on big losses,” Pianalto said. “To break this cycle, a coordinated set of policies is needed to target multiple points of the breakdown in the housing market.”

She said loan modifications alone won’t be enough to address the housing crisis, noting that the main reason that most borrowers cite for needing assistance is income loss due to the weak economy.

“We have learned that numerous interventions are required to address the multiple causes and consequences of the foreclosure crisis, and we will continue to focus our outreach and analysis on understanding and contributing to solutions in real time,” Pianalto said. “A healthy housing sector is critical both to the overall economy and to a sustainable economic recovery.”

(c) 2010, MarketWatch.com Inc.

Distributed by McClatchy-Tribune Information Services.

Want instant access to great articles like this for your blog or newsletter? Check out our 30-day FREE trial of REsource Licensed Real Estate Content Solutions. Need easy stay-in-touch e-Marketing solutions too? Try Pop-a-Note for 99 cents!
Join RISMedia on Twitter and Facebook to connect with us and share your thoughts on this and other topics.




Copyright© 2014 RISMedia, The Leader in Real Estate Information Systems and Real Estate News. All Rights Reserved. This material may not be republished without permission from RISMedia.

Content on this website is copyrighted and may not be redistributed without express written permission from RISMedia. Access to RISMedia archives and thousands of articles like this, as well as consumer real estate videos, are available through RISMedia's REsource Licensed Content Solutions. Offering the industry’s most comprehensive and affordable content packages. Click here to learn more! http://resource.rismedia.com

Our Latest News >>