Federal Reserve Governor Sarah Bloom Raskin discussed how the large number of foreclosures is affecting the U.S. legal system in her address to the Maryland State Bar Association Advanced Real Property Institute on October 4. Raskin noted that the magnitude of foreclosures has strained the courts, and falling housing prices have shaken the contractual relationships that make up the nation's mortgage finance system.

In addition to looking at impacts, Raskin noted that the high number of foreclosures has also created opportunities. She encouraged the legal community to seek ways to improve the available array of mortgage contracts to better serve clients in the field of mortgage finance and to build new contractual mechanisms needed for a healthy securitization market.

Raskin, who is an attorney, was the commissioner of financial regulation for the state of Maryland before her appointment to the Federal Reserve Board of Governors. Prior to that, she was managing director at the Promontory Financial Group, and she also served as the banking counsel for the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

A pdf version of "Legal Opportunities and Challenges in Crafting a Foreclosure Response" is also available.