Feb 12 2009

Keeping People in Their Homes: Policy Recommendations for the Foreclosure Crisis

Report  
Number  
182

For the previous eight years, the United States’ economy has experienced one of the most dramatic boom-bust cycles in history, fueled largely by the housing market. This report looks at the impact in the state of Michigan.

Robert Manning
Research Professor
Rochester Institute of Technology
Report Number 182

Executive Summary

In late 2008, the Michigan Credit Union Foundation (MCUF) requested a research report addressing the impact of the current mortgage foreclosure crisis in Michigan. Specifically, MCUF requested a report that: 

  • Identified the major factors contributing to the rise of mortgage foreclosures.
  • Investigated the economic impact of the current mortgage foreclosure crisis. 
  • Assessed the effectiveness of current federal and state programs to reduce the number of foreclosures. 
  • Formulated a series of public and private sector policy recommendations to stem the flow of future foreclosures. 

A variety of research methodologies were employed to accomplish these tasks including in-person and telephonic interviews with lenders and other topical experts, extensive review of secondary data sources, and periodic discussions with MCUF staff.

What is the research about?

In this special report Professor Bob Manning presents a nuanced view of the foreclosure debate, and offers 10 recommendations to help stem the number of foreclosures. While the paper was written specifically for the State of Michigan, other locales across the United States will find the specific recommendations applicable and useful.

There is no easy answer to the foreclosure debate. However, with policymakers at the state and federal level being urged to “do something” about foreclosures this paper will contribute to your credit union’s understanding of the complex foreclosure debate and help you formulate a range of possible foreclosure prevention remedies.

What are the credit union implications?

With increasing corporate bankruptcies and accompanying job losses, the residential foreclosure crisis is a top priority of financially distressed households, community leaders, public policymakers, and business executives. As we finalize this report, a flurry of legislative proposals and private sector initiatives are being debated over how to ease the foreclosure crisis, help families keep their homes, and stabilize the banking sector. We hope this report will contribute to the urgent debate and ultimately help alleviate the serious and complex housing situation in Michigan and the United States.