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REO & Vacant Properties: Strategies for Neighborhood Stabilization

A Joint Publication of the Federal Reserve Banks of Boston and Cleveland and the Board of Governors

The foreclosure crisis that the nation continues to grapple with has led to scores of real-estate-owned, or REO, properties. These and other vacant properties erode the values of nearby houses, fracture neighborhood stability, and threaten to undo decades of economic progress made in communities across the country over the past 25 years. How big is the REO problem? How are communities, banks, and policymakers dealing with the challenge? Most important, what approaches are showing the most promise for success.

REO & Vacant Properties: Strategies for Neighborhood Stabilization, both a national summit and a companion publication, focus on how policy makers and community development practitioners can help stabilize neighborhoods most at risk for decline. The publication contains 17 articles that aim to shed light on the scope of the problem in specific areas of the country and to showcase some methods for dealing with the challenge of vacant and REO properties.

Really bad drawings…real simple explanations


  • Table of Contents and Acknowledgments
  • Letter from Presidents Rosengren and Pianalto and Governor Duke
  • About the MORE Initiative
  • Foreword

Section I: Research and Analysis

The Scope and Nature of the REO Challenge

  • REO Properties, Housing Markets, and the Shadow Inventory by Allan Mallach, Brookings Institution
  • Shuttered Subdivisions: REOs and the Challenges of Neighborhood Stabilization by Carolina K. Reid, Federal Reserve Bank of San Francisco
  • Holding or Folding? Foreclosed Property Durations and Sales during the Mortgage Crisis by Dan Immergluck, Georgia Institute of Technology
  • REO and Beyond: The Aftermath of the Foreclosure Crisis in Cuyahoga County, Ohio by Claudia Coulton, Michael Schramm, and April Hirsh, Case Western Reserve University
  • Examining REO Sales and Price Discounts in Massachusetts by Kai-yan Lee, Federal Reserve Bank of Boston
  • Maximizing the Impact of Federal NSP Investments through the Strategic Use of Local Market Data by Ira Goldstein, The Reinvestment Fund
  • Servicing REO Properties: The Servicer's Role and Incentives by Stergios Theologides, CoreLogic

Section II: Solutions

Strategies for Dealing with REO and Vacant Properties

  • Acquiring Property for Neighborhood Stabilization: Lessons Learned from the Front Lines by Craig Nickerson, National Community Stabilization Trust
  • REO Disposition and Neighborhood Stabilization: A Servicer's View by Jay N. Ryan Jr., Fannie Mae
  • Acquiring Privately Held REO Properties with Public Funds: The Case of the Neighborhood Stabilization Program by Harriet Newburger, Federal Reserve Bank of Philadelphia
  • Nonprofit Strategies for Returning REO Properties to Effective Use by Daniel Fleischman
  • Purchasing Properties from REO and Reselling to Existing Occupants: Lessons from the Field on Keeping People in Place by Elyse D. Cherry, Boston Community Capital, and Patricia Hanratty, Aura Mortgage Advisors
  • The Community Asset Preservation Corporation: A New Approach to Community Preservation by Harold Simon, National Housing Institute
  • Embracing Renting to Accelerate Neighborhood Recovery by Danilo Pelletiere, National Low Income Housing Coalition
  • Cleaning Up After the Foreclosure Tsunami: Practices to Address REOs in Northeast Ohio by Frank Ford, Neighborhood Progress Inc.
  • How Modern Land Banking Can Be Used to Solve REO Acquisition Problems by Thomas J. Fitzpatrick IV, Federal Reserve Bank of Cleveland
  • The Community Reinvestment Act and NSP: A Banker's Perspective by Mike Griffin, KeyBank