The foreclosure literature clearly links negative community impacts resulting from concentrated foreclosures. Impacts documented in the literature include increased vacancies, increased crime, decreased property values, and potential long-term neighborhood decline as a result of foreclosures. These impacts drain the community of their collective asset holdings of social capital, and community wealth as well as impacting the longer-term resiliency of the neighborhood. Drawing on interviews with real estate agents, ethnographic observation of foreclosure sales, foreclosure sales contracts and other related documents, and analysis of city-wide sales, crime and vacancy data for Boston, this paper will argue that these negative outcomes are not a foregone conclusion.

The paper will demonstrate that it is the foreclosure sale process that causes these negative outcomes in the neighborhood. The procedures for these sales processes are often decided by individuals (managers and lawyers) working within mortgage servicing organizations, and by real estate agents working for the mortgage servicing organizations. By understanding the individual actions involved in the creation of these sales processes, new structures and regulations could be put in place to change how the sales process unfolds so that neighborhoods do not experience negative impacts from concentrated foreclosures. This would help preserve community assets in the face of foreclosures. Responding to the observed causes of negative outcomes in neighborhoods in Boston, the paper will conclude by making recommendations for policy-makers that could prevent the negative impacts from occurring as a result of current foreclosure sales practice.