Lauren Lambie-Hanson
Title: Senior Specialist in Risk Assessment, Data Analysis and Research at the Federal Reserve Bank of Philadelphia
Age: 29    
Experience: 4 years

A Hoosier by birth, Lauren Lambie-Hanson came to Boston to pursue a Ph.D in urban studies at MIT, but somehow got tricked into being an economist. Her innovative work on the impact of the foreclosure crisis in Boston is already drawing attention in academic circles (including a 2010 Harvard fellowship). Not bad for someone who only finished her doctoral degree this past May. Data from The Warren Group, publisher of Banker & Tradesman, was one of the sources Lambie-Hanson drew on for her thesis.

Q: So did you always want to be a housing economist when you grew up?

A: I’m not really an economist, but they let me hang out with them. I did my master’s in public policy and my Ph.D is in urban studies. But I really like working with data, answering policy questions using large data sets. And it seems like economists are some of the best at that.

Q: How did you decide to study foreclosure in particular?

A: My faculty advisor knew Ann Houston, [executive director of] Chelsea Neighborhood Developers. And she and Ann had been talking about whether property investors in Chelsea were more likely to go into foreclosure than occupant-owners … one of our requirements at MIT is to write a paper our first year, and I needed a topic. So I got involved, ended up going to Chelsea and from there went [to work at] the Fed so I could answer this question about investors in Chelsea.

Q: What was the answer?

A: The answer was basically that local property investors were more likely to go into foreclosure than either occupant owners or non-local investors – local being like, Chelsea, Revere, the adjacent communities. We found they were investing a lot more money in the properties, and seemed to be a lot more leveraged and maybe less diversified than outside investors.

Q: So was it that paper that piqued your interest in foreclosures as a topic?

A: Well, I’d been interested in housing issues even as an undergraduate student, and there was really no bigger issue facing the housing market than the foreclosure crisis. It was a great way to learn about Boston, too, since I’m not from New England originally. I remember [feeling lucky compared to] some of the other students [in my program] who were pursuing housing topics, who were sort of told [by city officials], “Look, until we figure out the foreclosure crisis, we’re really not going to be focusing on these other issues” like affordable housing. And that’s even true in cities like Boston, which have had a foreclosure problem, but nothing like [as severe as] Cleveland or Detroit. So it’s really important to me to add to this literature. 

Q: What do you think the big unanswered questions are out there about foreclosures?

A: It seems like everyone across the country is trying to figure out how to tell at what point in the process a property becomes vacant. On the one hand, we know that in a lot of cases these properties aren’t becoming vacant until well after the foreclosure happens and banks often have to take the borrower to court to get them evicted. On the other hand, a lot of times people move out well before the auction, because they know a foreclosure is inevitable, and maybe they’ve gotten a new job in a new city or it’s just too painful to stay in the house. So it’s really unclear when most properties become vacant, if ever, and that has really serious implications for stabilizing these properties. If I could have one wish, it would be to get NSTAR data on electricity use in these properties.

Using the different data sets I complied for my thesis] I can tell when the foreclosure petition is filed, when the property is actually in foreclosure, and when the auction happens… there’s often a big lag between when the foreclosure auction happens and when the foreclosure deed is filed. People who study foreclosures are always underestimating the amount of time properties spend in REO, because there’s often this big lag between the foreclosure auction and when the bank’s attorney gets around to filing the deed. It can be up to a year later. So it’s often really difficult for, say, the city of Boston to actually tell what properties are REO.

Q: Has anything surprised you about what you found out by studying this area?

A: It’s interesting, I think perhaps coming into this topic, I thought there’d be a lot more evidence of aggressive, ruthless investors taking advantage of communities. And I’ve found through doing this that while there are some bad apples, there are a lot of people doing really good work – who happen to be profit motivated. But at the same time you do see the integral role that some of the non-profit agencies play in rehabilitating some of these properties that the for-profit entities really can’t handle. So it takes everyone working together to get past this crisis, even in a strong-market city like Boston.