**GAO-09-231T**                      Published: Dec 04, 2008. Publicly Released: Dec 04, 2008.                  

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## Highlights

A dramatic increase in mortgage loan defaults and foreclosures is one of the key contributing factors to the current downturn in the U.S. financial markets and economy. In response, Congress passed and the President signed in July the Housing and Economic Recovery Act of 2008 and in October the Emergency Economic Stabilization Act of 2008 (EESA), which established the Office of Financial Stability (OFS) within the Department of the Treasury and authorized the Troubled Asset Relief Program (TARP). Both acts establish new authorities to preserve homeownership. In addition, the administration, independent financial regulators, and others have undertaken a number of recent efforts to preserve homeownership. GAO was asked to update its 2007 report on default and foreclosure trends for home mortgages, and describe the OFS's efforts to preserve homeownership. GAO analyzed quarterly default and foreclosure data from the Mortgage Bankers Association for the period 1979 through the second quarter of 2008 (the most recent quarter for which data were available). GAO also relied on work performed as part of its mandated review of Treasury's implementation of TARP, which included obtaining and reviewing information from Treasury, federal agencies, and other organizations (including selected banks) on home ownership preservation efforts. To access GAO's first oversight report on Treasury's implementation of TARP, see GAO-09-161.

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## Topics

Financial Markets and Institutions

Banking lawBanking regulationComparative analysisEconomic analysisstate relationsFinancial analysisFinancial institutionsFinancial managementFinancial markets regulationForeclosuresHomeowners loansHousingHousing programsLending institutionsMortgage interest ratesMortgage loansMortgage programsMortgage-backed securitiesProgram evaluationStandards evaluationProgram goals or objectivesProgram implementation