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The Foreclosure Crisis at Five Years Old

The Foreclosure Crisis at Five Years Old. Some Progress. Housing prices increased in almost 90% of US cities in Q2 2013 The national foreclosure rate has fallen by 52% since its peak in 2010 4.5 million foreclosures have been completed since 2008. Challenges Remain: .

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The Foreclosure Crisis at Five Years Old

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  1. The Foreclosure Crisis at Five Years Old

  2. Some Progress • Housing prices increased in almost 90% of US cities in Q2 2013 • The national foreclosure rate has fallen by 52% since its peak in 2010 • 4.5 million foreclosures have been completed since 2008

  3. Challenges Remain: • 1 million homes (2.3 % of all mortgages) are still in foreclosure, and 2.3 million (5.6%) are seriously delinquent • 2.2 trillion loss in property values for homeowners near foreclosed properties

  4. Challenges Remain: • 24% of homeowners are under-equitied or underwater; over half are underwater by 20% or more.

  5. Regional Patterns • Significant state-wide variation in the pace of recovery • Pace of recovery influenced by presence of investors, low interest rates

  6. An Investor-Driven Recovery? • Over 50% of home sales in 2012 and 2013 have been cash-only • In some cases, private investors crowd out individual homeowners and nonprofit developers http://www.realtytrac.com/content/news-and-opinion/individual-investors-feeling-squeezed-out-by-bulk-buyers-7673

  7. Challenges for Communities and Governments • NSP funds are running out: need for new sources of capital for community revitalization • Opportunities for public-private partnerships to address ongoing issues in distressed neighborhoods • Local market characteristics and policies drive investor behavior

  8. Investors and Incentives: Las Vegas vs. Detroit • Different markets lead to different investor behavior

  9. Rebuilding Communities – Ongoing Challenges • Recession-driven wealth losses undid decades worth of investment in black and Hispanic households • Tighter post-recession credit standards disproportionately impact lower-income and minority communities • Dodd-Frank regulations may impact delivery of credit to underserved communities

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