To solve the continuous growth of listings of bank foreclosures all over the country, Federal Reserve Bank of Boston president Eric Rosengren has urged for a broader approach that will touch upon underlying issues associated with foreclosures. The bank president made the recommendation during the Federal Reserve forum in Washington D.C.
To better address local housing market problems like Boston home foreclosures, Rosengren has called for a more holistic focus, particularly among communities that have been hit the hardest by the property market crisis. According to him, the foreclosure problem goes beyond housing, there are also economic and social issues underlying this crisis that make its impact worse in certain areas.
Some local areas in the state have suffered from the impact of home foreclosures in Massachusetts more so than others. This is the same in all U.S. states, with the impact of the crisis varying across local municipalities. Rosenberg has stated that in such cases, the foreclosure problem seemed to be a sign of deeper issues such as crime, poorly managed schools and poverty.
To address these problems in a more effective way, Rosengren has suggested that funds be provided to nonprofit organizations and local governments for them to be able to address these broader issues that exacerbate the problem of distressed properties and listings of bank foreclosures.
He further added that there has not been much attention given to community or local problems because most efforts are centered on the housing market and foreclosure listings. Instead of focusing on the symptom of high foreclosure rates, the bank president has suggested addressing general problems in local communities that cause numbers of foreclosed properties to rise and made the housing crisis worse.
One example that can be used to demonstrate Rosengren's claims is Massachusetts. In the state, foreclosure numbers surged by almost 80% in July compared with the same period in 2009. Data released by real property tracking company Warren Group showed that foreclosure totals in the state remain high despite the fact that banks have initiated fewer proceedings in 2010 compared with the 2009 period.
Rosengren has added that policymakers should adopt a holistic approach, wherein the focus will go beyond efforts to lower listings of bank foreclosures to include economic and social issues that might be contributing to the foreclosure crisis.
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