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Supporting Consumers, Collaborating with Colleagues

In 2009, the Federal Reserve System's Conference of Presidents continued to work on the Mortgage Outreach and Research Efforts (MORE). MORE's goal is to encourage a coordinated and collective understanding of mortgage delinquencies and foreclosures and their impact on communities.

Speaking at the December 10, 2009, Mortgage Foreclosure Policy Conference, Federal Reserve Governor Elizabeth A. Duke said, "At the Board of Governors in Washington, and at the regional Federal Reserve Banks across the country, we are providing data and bringing together different parties from the private, public, and nonprofit sectors to encourage strategies for refinance, loan modification, short sales, and other alternatives to prevent foreclosures." The knowledge of many, brought together as one, can have considerable impact on the nation's response to the mortgage crisis.

Several Philadelphia Fed departments are supporting the MORE initiative. Research; Supervision, Regulation and Credit; and the Payment Cards Center (PCC), along with Community Affairs, have pooled their resources to develop research papers, host conferences, and provide information for the Bank's website to help consumers and communities affected by foreclosures.

Conference on "Understanding the Housing and Mortgage Markets: What Data Do We Have? What Data Do We Need?"

This conference, co-sponsored by Community Affairs and the PCC, focused on issues such as the types of data currently available and their shortcomings, the data elements most critical for understanding the mortgage and housing markets, and a range of other topics that must be considered in developing better databases. Panelists included users of state and local data and government officials who have been involved in efforts to improve the quality of these data.

Supporting ConsumersAlthough Community Affairs fosters public-private partnerships that result in increased affordable housing and community development, the mortgage market was a new area of research for the PCC. But both areas recognized the strong links between the mortgage crisis and other consumer credit markets and the value in collaborating on this joint project. Harriet Newburger, community development research advisor, Community Affairs Department, explained the need for such an event: "The lack of readily accessible data on the mortgage market negatively affected the ability to predict how severe the mortgage crisis and its spillovers would be. It has also hampered efforts to alleviate the effects of the crisis."

Many of the lessons learned at this event have already contributed to changes in the way the Federal Reserve System uses and shares mortgage-related data for the purposes of risk assessment, foreclosure mitigation, and research.

Pennsylvania's Lowest-Income Renters Have the Greatest Needs

Nearly 85 percent of Pennsylvania's extremely low-income (ELI) renter households spend more than 30 percent of their income on housing and 69 percent spend more than 50 percent. There is also a severe shortage of affordable and available rental housing across the state for ELI renters. These findings and more are reported in a study conducted last year by Erin Mierzwa, community development specialist, Community Affairs, and Kathryn P. Nelson, an affordable housing consultant, along with Harriet Newburger, also in Community Affairs.


The study is particularly relevant because approximately 30 percent of all Pennsylvania households are renters with access to a limited supply of available and affordable housing. The study provides local policymakers with solid data they can use to help develop local rental housing strategies.

Concentrated Poverty and Atlantic City's Future

In 2008, Community Affairs offices in the Federal Reserve System, including the Philadelphia Fed, undertook a joint research project with the Brookings Institution's Metropolitan Policy Program that examined 16 American communities characterized by extreme poverty. The Philadelphia Fed's part of this System-wide study concentrated on several census tracts within Atlantic City, New Jersey. The report highlighted the workforce paradox of plentiful jobs co-existing with high rates of poverty and unemployment. The researchers also identified concerns that residents have about their neighborhoods and their future status in Atlantic City.

The larger System report piqued the Community Affairs staff's interest in Atlantic City and led them to take a closer look. The result was Atlantic City: Past as Prologue PDF icon, a fuller study that covers the growth and decline of Atlantic City and the conditions in the city since casino gambling was legalized in 1978 as a "unique tool of urban redevelopment." The research team consisted of Harriet Newburger and John Wackes, both in Community Affairs, and Anita Sands, ARI Planning and Research, Inc.

A presentation of the study's findings to Atlantic City officials and other interested parties has led to a number of initiatives, including collaboration between the Atlantic City school system and Wells Fargo Bank on a program to promote financial literacy (the bank chose Atlantic City as its East Coast site for rolling out the program) and development of a course at Atlantic City's Stockton College based on the report.

Other Efforts to Help Consumers

Community Affairs also hosted several events on the "Making Home Affordable" loan program, foreclosure scams, and mortgage foreclosure diversion programs. These meetings were organized by the department in conjunction with the Greater Philadelphia Urban Affairs Coalition's Foreclosure Prevention Task Force and the Financial Education Network, a group of financial educators. The goal of the meetings was to help housing, credit counseling, and other nonprofits, financial institutions, and government agencies understand the programs that are available to help borrowers avoid foreclosure.

In addition, the Federal Reserve Board of Governors developed "5 Tips," a public service campaign to give consumers the basic information they need to recognize and avoid foreclosure prevention scams. The Philadelphia Fed supported the campaign by distributing tip sheets to all branches of the Free Library of Philadelphia; offices of the Special Supplemental Nutrition Program for Women, Infants, and Children; and military bases located in the Third District. The Bank also promoted the tip sheets on its website and made copies available to employees.