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While the housing market shows early signs of recovery—with some progress even in the hard-hit states of California, Nevada, Arizona, and Florida—the backlog of homes in foreclosure and homes held in REO by banks is large and growing. This is particularly true on the east coast, where the duration of the foreclosure process is high due to judicial procedure for foreclosure. This accumulating volume of homes continues to weigh on the housing recovery and general economic improvement. The need for good public policy at the state and local as well as national level to minimize deadweight losses and externalities around foreclosure and the REO inventory remains compelling. This conference was designed to first examine the impact of foreclosures in its many dimensions and then review the effectiveness of a range of proposed policy initiatives. The focus in particular was on state and local level initiatives, and participants shared a diverse set of experiences with different projects.
The conference pulled together professionals with different areas of expertise. The expert panelists first attempted to quantify the pipeline of homes sliding into foreclosure, homes in foreclosure and homes in REO. Other experts presented key findings on the impact of foreclosures on home prices, neighborhoods and families, and state and local finances. Elizabeth Duke, one of the governors of the Federal Reserve Board, gave a keynote lunch speech discussing the impact of long-term vacancies on neighborhood stabiliza- tion. The last session of the conference addressed foreclosures and REOs with a set of multi-faceted solutions. Expert panelists presented research that suggests mortgage counseling, certain forms of principal reduction, emergency mortgage assistance, and settlement conferences can be effective measures. We hope you find this set of papers informative and useful.