Fed's Duke says foreclosure crisis impact and solutions vary by city
Data collected by the Federal Reserve suggests the foreclosure crisis is impacting cities nationwide, but the solutions to the cities problems are likely to vary. In other words, a one-size-fits-all strategy will not sort out the foreclosure crisis plaguing Cleveland, Phoenix and Detroit, according to Federal Reserve Governor Elizabeth Duke, who shared some of the Fed's findings on the crisis Thursday. According to Duke, while foreclosures in Cleveland and Detroit are the result of an overall declining economy and job losses in the region, both cities have benefited from initiatives spawned by nonprofits, public officials and private sector parties working together to target and revitalize troubled neighborhoods. "While the problem touches every community, it doesn't look the same in each because it's shaped by the circumstances that prevailed in those neighborhoods before the crisis hit," Duke said. She added that Phoenix — unlike Cleveland and Detroit — is facing a problem that has more to do with an influx of new home inventory than job losses. Duke blames an oversupply of fairly new homes for bringing the foreclosure crisis into new, middle-class neighborhoods that are generally shielded from the crisis. In Phoenix, "public-private partnerships have reached out to real estate professionals to help connect eligible families with affordable homes," Duke said. "The challenge for those trying to revitalize neighborhoods is to ensure that qualified homeowners and nonprofits are in a position to compete with investors for these now affordable homes, and the city and private sector have come together to achieve this goal." Write to Kerri Panchuk.