Bank and Fannie Mae Foreclosures Should Be Addressed by Communities

by on Foreclosure Crisis

In a U.S. federal government-sponsored forum designed to address the problem of high number of bank and Fannie Mae foreclosures all around the country, Federal Reserve Bank of Cleveland president Sandra Pianalto has seconded the suggestion of Boston Fed bank top official Eric Rosengren that local communities are key to solving the housing market problem.

The Cleveland, Ohio bank president has expressed support towards her Boston counterpart's recommendation to launch community-centered efforts to address the issue of declining property values caused mainly by the oversupply of cheap foreclosures for sale. She also stated that helping homeowners avoid foreclosure is key to an economic sustainable recovery.

Pianalto also called attention to the fact that even before the record increase in the number of Ohio foreclosed homes for sale, the state is already suffering from poorly designed measures that were supposed to address problems in public safety, health and education. She also emphasized that solving issues related to these sectors is necessary if the state and the whole country is to get the residential property sector back on its feet.

Both Pianalto and Rosengren have asserted that a uniform solution for all states and cities will not solve bank and Fannie Mae foreclosures problems. They argued that addressing local factors that contribute to higher foreclosure rates is the way to getting out of the property market crisis.

Pianalto has also reported that the residential property industry in her district is being weighed down by thousands of foreclosures sale and is still very far from any form of recovery. The Cleveland bank president has stated that REO-related problems are severe and the area's resources are limited.

The longer homes remain empty, the more severe their impact on neighborhoods, causing increased crime rates and further declines in home values, Pianalto has stated. She then asserted that federal and local government revenue sharing can help local communities solve problems in their areas, including lack of police officers and teachers.

Pianalto, along with Boston Federal Reserve bank top official Eric Rosengren, took advantage of the convention to air their views about the need for local communities to take control of the high number of bank and Fannie Mae foreclosures. They also stated that federal assistance is needed for local government efforts to work.

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