Maryland/District of Columbia 

North Carolina

South Carolina 

Virginia 

West Virginia

The views expressed in the Mortgage Performance Summaries are those of the contributors and not necessarily of the Federal Reserve Bank of Richmond or the Federal Reserve System.

Foreclosure Maps and Data

The Federal Reserve Conference of Presidents' Mortgage Outreach and Research Efforts: Responding to the Foreclosure Crisis An Interim Report

June 2010

In the spring of 2009, under the auspices of the Conference of Presidents, the Federal Reserve System embarked on a collaborative effort known as Mortgage Outreach and Research Efforts (MORE), aimed at leveraging the substantial knowledge and expertise across the System related to mortgage markets that might prove useful to policymakers, community organizations, financial institutions, and the public. This report highlights the work of the MORE initiative through June of 2010, and describes the research and outreach work accomplished in 2009 by the Economic Research, Community Affairs, and the Supervision and Regulation departments of the Reserve Banks and the Board of Governors.

In addition to the report, the Federal Reserve commissioned/produced four literature reviews that analyze existing literature, document the strengths and weaknesses of previous research efforts and methodologies, and identify gaps in knowledge.

• Financial Literacy and The Effectiveness of Financial Education and Counseling 
• Effect of Mortgage Foreclosures on Nearby Property Values 
• Foreclosure Prevention Efforts 
• Mortgage Defaults 

The Role of Non-Owner-Occupied Homes in the Current Housing and Foreclosure Cycle

June 2010

Non-occupant homeowners differ from owner occupants in that they tend to have lower-risk credit characteristics, such as higher credit scores, but may also have weaker incentives to maintain mortgage payments when housing values fall. During the recent housing boom, the share of mortgage borrowing by non-occupant owners was relatively high in states where home values appreciated relatively rapidly. After the housing boom, foreclosures on non-occupant mortgages in several Midwestern and Northeastern states reflected primarily a high rate of foreclosure per mortgage, not a high volume of mortgages to non-occupants. The reverse held true in some coastal and mountain states. Nevada and Florida have experienced the greatest impact overall, because they have both a high volume of mortgages to non-occupant owners and a high rate of foreclosure on those mortgages.

Housing Default: Theory Works and So Does Policy

May 2010

Using a national loan level data set we examine loan default as explained by local demographic characteristics and state level legislation that regulates foreclosure procedures and predatory lending through a hierarchical linear model. We observe significant variation in the default rate across states, with lower default levels in states with higher temporal and financial costs to lenders when controlling for loan and location conditions. The results are notable given that many of the observed loans were sold to investors in national and international markets. State level legislative influences provide a foundation for discussion of national level policy that further regulates predatory lending and financial institution foreclosure activities.

Weathering the Storm: Have IDAs Helped Low-Income Homebuyers Avoid Foreclosure? 

April 2010

This study provides the first evidence available on loan terms and foreclosure outcomes among individuals who purchased their home through individual development account (IDA) programs. Our results suggest that IDA homebuyers are more likely to receive government-insured loans and less likely to receive high interest rate or subprime loans than other low-income homebuyers.

Residential and Mortgage Default: The Roles of House Price Volatility, Euphoria and the Borrower's Put Option 

March 2010

House price volatility; lender and borrow perception of price trends, loan and property features; and the borrower’s put option are integrated in a model of residential mortgage default.

Loan Modifications as a Response to the Foreclosure Crisis: An examination of Subprime Loan Outcomes in Maryland and the Surrounding States 

December 2009

As mortgage foreclosures have increased in the last two years, federal, state, and local agencies have all struggled with an appropriate response. One barrier to crafting more effective outreach, counseling and other interventions is a lack of information about the incidence of foreclosure at the local level and the provision of alternatives to foreclosure by financial firms. The advent of the federal Making Home Affordable program has introduced an additional factor to the mortgage servicing system. While only recently implemented, this program has the potential to result in greater use of loan modifications as alternatives to foreclosure. Understanding the current context of loan defaults and the response by financial institutions in this changing context is critical.

Second Chances: Subprime Mortgage Modification and Re-default 

December 2009

Mortgage modifications have become an important component of public interventions designed to reduce foreclosures. In this paper, the authors examine how the structure of a mortgage modification affects the likelihood of the modified mortgage re-defaulting over the next year.

National Foreclosure Mitigation Counseling Program Evaluation: Preliminary Analysis of Program Effects 

November 2009

The National Foreclosure Mitigation Counseling (NFMC) program is a special federal appropriation, administered by NeighborWorks® America, that is designed to support a rapid expansion of foreclosure intervention counseling in response to the nationwide foreclosure crisis. This report presents the results of preliminary analyses that attempt to measure the effects of the NFMC program on counseled homeowners. Overall, our analysis suggests that the program is having its intended effect of helping homeowners facing loss of their homes through foreclosure.

Recourse and Residential Mortgage Default Theory and Evidence from U.S. States, FRB Richmond Working Paper

 July 2009

The authors analyze the impact of lender recourse on mortgage defaults theoretically and empirically across the U.S. states. They study the effect of state laws regarding deficiency judgments in a model where lenders can use the threat of a deficiency judgment to defer default or to shorten the default process.

Why Don't Lenders Renegotiate More Home Mortgages? Redefaults, Self-Cures and Securitization, FRB Boston Public Policy Discussion Paper No. 09-4

July 2009

The authors document the fact that servicers have been reluctant to renegotiate mortgages since the foreclosure crisis started in 2007, having performed payment-reducing modifications on only about three percent of seriously delinquent loans. They use a theoretical model to show that redefault risk and self-cure risk make renegotiation unattractive to investors.

A Proposal to Help Distressed Homeowners: A Government Payment-Sharing Plan, FRB Boston Public Policy Brief No. 09-01 

July 2009

This public policy brief presents a proposal designed to help homeowners who are unable to afford mortgage payments on their principal residence because they have suffered a significant income disruption and because the balance owed on their mortgage exceeds the value of their home.

The Impacts of Foreclosures on Families and Communities: A Primer

May 2009

The authors scan available research and other sources to assess how much we know about the way foreclosures impact families and communities and offer suggestions on what the findings have to say about the need for additional research and about how to address the crisis at the local level.

Seismic Effects of the Bankruptcy Reform

November 2008

The authors analyze changes to bankruptcy law in 2005 and argue that it shifted risk from credit card lenders to mortgage lenders and that this contributed to the increase in subprime foreclosures. 

Lending on Low- and Moderate-Income Neighborhoods in California: The Performance of CRA Lending During the Subprime Meltdown

November 2008

The authors analyze the performance of loans originated in California by CRA-regulated and non-CRA-regulated financial institutions. They find that loans by CRA-regulated institutions performed better than those made by independent mortgage companies, controlling for a wide range of borrower, loan and lender characteristics.

Community Stabilization Strategies-Where Main Street Meets Wall Street and Pennsylvania Avenue

October 17, 2008

Presentation by Joe Schilling of the Metropolitan Institute at Virginia Tech and the National Vacant Properties Campaign.

Synopses of Selected Research on Housing, Mortgages, and Foreclosures

September 1, 2008

The contributions in this document are synopses of key findings from research and Federal Reserve System policy analysis on selected topics relating to housing, mortgage loan performance, and foreclosures.

A Snapshot of Mortgage Conditions with an Emphasis on Subprime Mortgage Performance

August 27, 2008

This document provides facts and figures that pertain to the recent increase in mortgage foreclosures.

"Armed Against ARMS"

Fall 2007

Educating low-income borrowers may be an effective — if oft-overlooked — way to minimize mortgage losses

Foreclosure Response Podcasts 
Federal Reserve Bank of Atlanta