Foreclosure Crisis Rivaling Great Recession Likely: St. Lous Fed



Though a foreclosure crisis is on the horizon, experts say recent fiscal policy will prevent a full collapse of the financial system.

“It’s a slow-moving process,” Bill Emmons, an economist at the St. Louis Federal Reserve, said during a presentation on housing insecurity on Wednesday. “It definitely looks like there will be another major event, but hopefully not as bad as the foreclosure crisis associated with the Great Recession.”

This time around, however, the financial system won’t collapse, Emmons predicted, thanks to measures taken in recent months which provided liquidity to the market. The Fed announced in March it would buy back $200 billion in mortgage-backed securities, and has signaled that its benchmark rate will remain low through 2023, which will in turn keep mortgage rates low. Emmons said public health policies, on the other hand, have “fallen short.”

The actual level of distress is difficult to determine because

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