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Too Little, Too Late, and Too Timid: The Federal Response to the Foreclosure Crisis at the Five-Year Mark

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  • Dan Immergluck

Abstract

The primary federal policy responses to the foreclosure crisis, thus far, include programs to reduce foreclosures and efforts to mitigate the impacts of foreclosures on communities. This paper reviews policy responses between 2007 and 2012. While there is less information at this point on the outcomes of mitigation polices, the overall federal response is thus far lacking. The programs pale in comparison with the challenges they are intended to solve and suffer from other program design and implementation problems. Foreclosure prevention efforts, in particular, are faulted for being too reliant on marginal incentive payments, for failing to include a key policy, bankruptcy modification, which would have encouraged lenders to modify loans more aggressively, and for not sanctioning servicers more aggressively for poor performance and/or noncompliance. The overall federal response is also characterized as moving too slowly in some cases and being too captive to the policy preferences of the financial services industry.

Suggested Citation

  • Dan Immergluck, 2013. "Too Little, Too Late, and Too Timid: The Federal Response to the Foreclosure Crisis at the Five-Year Mark," Housing Policy Debate, Taylor & Francis Journals, vol. 23(1), pages 199-232, January.
    • Handle: RePEc:taf:houspd:v:23:y:2013:i:1:p:199-232
    DOI: 10.1080/10511482.2012.749933
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    1. Agarwal, Sumit & Amromin, Gene & Ben-David, Itzhak & Chomsisengphet, Souphala & Evanoff, Douglas D., 2010. "Market-Based Loss Mitigation Practices for Troubled Mortgages Following the Financial Crisis," Working Paper Series 2010-19, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
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    Cited by:

    1. Alexander C Tsai, 2015. "Home Foreclosure, Health, and Mental Health: A Systematic Review of Individual, Aggregate, and Contextual Associations," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-21, April.
    2. Jacob W. Faber & Peter M. Rich, 2018. "Financially Overextended: College Attendance as a Contributor to Foreclosures During the Great Recession," Demography, Springer;Population Association of America (PAA), vol. 55(5), pages 1727-1748, October.
    3. Emily S. Taylor Poppe, 2016. "Homeowner Representation in the Foreclosure Crisis," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 13(4), pages 809-836, December.
    4. Kyungsoon Wang, 2019. "Housing market resilience: Neighbourhood and metropolitan factors explaining resilience before and after the US housing crisis," Urban Studies, Urban Studies Journal Limited, vol. 56(13), pages 2688-2708, October.
    5. Jennifer Lewis Buell & Kimberly Burnett & Larry Buron & Alvaro Cortes & Michael DiDomenico & Anna Jefferson & Christian Redfearn & Jenny Schuetz & Jonathan Spader & Stephen Whitlow, 2015. "Which Way to Recovery? Housing Market Outcomes and the Neighborhood Stabilization Program," Finance and Economics Discussion Series 2015-4, Board of Governors of the Federal Reserve System (U.S.).

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