With a grant from the National Science Foundation, researchers at the University of Houston and NORC are designing a small panel survey to illuminate the factors contributing to foreclosure (including a test of financial literacy) and what happens to families after they leave their foreclosed home. An additional research question is the impact of foreclosure on children. Interviews will be conducted with fifty families facing foreclosure in the second half of 2011 and these families will be interviewed again in the first half of 2012.
It is clear that residential market conditions remain and will continue to remain a major policy concern with significant economic consequences for the foreseeable future. Various public policy initiatives are being proposed with varying phases of implementation but with unclear means of evaluation of individual behavior. University of Houston researchers Bart Smith and Evert Crawford compiled a set of research findings that highlighted several important issues: refinancing was as much of a problem as were mortgages on home purchases; some of the "bad loans" were to first time home buyers, but many loans were associated with households "moving up" to housing that was really beyond their means; and some households would not be viable homeowners even if refinanced at low rates and at current value, but others would be capable of continuing ownership with some adjustment to the terms of their mortgage. Despite these findings, we still do not know the percentage breakdown of these various aforementioned categories, where foreclosed-upon households end up, and whether foreclosed households are still having financial troubles (due to other debt issues) after foreclosure.