Report: Foreclosures Will Sap U.S. Cities

Metro Areas Face Billions Of Dollars In Lost Economic Activity Next Year

(AP)  Rising foreclosures will lead to billions of dollars in lost economic activity next year in major U.S. cities, but homeowners and financial institutions have the ability to work together to contain the effects, said a report released Tuesday.

The report was compiled for a conference of U.S. mayors in Detroit. The mayors hope to create policy recommendations to help address the nation's housing crisis.

Prepared by forecasting and consulting firm Global Insight, the report said weak residential investment, lower spending and income in the construction industry and curtailed consumer spending because of falling home values will combine to hold back the nation's economic activity.

"The wave of foreclosures that has rippled across the U.S. has already battered some of our largest financial institutions, created ghost towns of once vibrant neighborhoods - and it's not over yet," the report said.

The biggest losses in economic activity are projected for some of the nation's largest metropolitan areas. New York is expected to lose $10.4 billion in economic activity in 2008, followed by Los Angeles at $8.3 billion, Dallas and Washington at $4 billion each, and Chicago at $3.9 billion.

The report estimates U.S. gross domestic product growth in 2008 will be 1.9 percent, coming in about $166 billion - or one percentage point - lower as a result of mortgage problems. GDP is the value of goods and services produced and is considered the best barometer of the country's economic fitness.

The report also projects property values will decline by $1.2 trillion in 2008, due in part to the foreclosure crisis, with drops in home prices across the U.S. averaging 7 percent. And it said the loss of property, sales and real estate transfer taxes will hurt local and state governments.

But homeowners, banks, holders of mortgage-backed securities and loan servicers can work together to ease the economic effects, the report said. Agreeing to new payment terms on some loans, for example, could make the difference between a family keeping a home and losing it in foreclosure.

"Such actions will help to lessen the number of foreclosures thereby avoiding the further negative effects on local housing markets and on the broader economy," according to the report, titled "The Mortgage Crisis: Economic and Fiscal Implications for Metro Areas."

The Detroit conference will address the state of the mortgage industry, ways homeowners can avoid foreclosure, and strategies to keep foreclosed properties from dragging down the quality of life in neighborhoods.

The mayors' recommendations are to be presented at a conference in January.

[omega39-2009]

The report also projects property values will decline by $1.2 trillion in 2008, due in part to the foreclosure crisis, with drops in home prices across the U.S. averaging 7 percent. And it said the loss of property, sales and real estate transfer taxes will hurt local and state governments.

Real wages have been falling for years, it was ridiculous for people to believe 10-18% annual growth in housing prices was desirable or sustainable. Housing prices are in for a long corrective period unless someone undertakes steps to prop up these artificially high prices.

[jetranger7]

There is and has been a plan to Bring the US into a 3rd World status, as your seeing with the housing crisis and Ridlicious high gas/oil prices and low wages for most jobs, and the credit card crunch everybody is in due to Corporate America (The Bankers),offering credit to anybody, even the dead ! GO "GOOGLE" - (OPERATION GARDEN PLOT), and read the plan, then GOOGLE (BILDERBERGER GROUP), if you don''t believe any of this,, it was hard for me to believe too, till I researched it in depth,, worth reading.

[aggiekat2004]

Who is really to blame for all of this? I''m not really as knowledgeable as I could be, but here''s my take on it. Didn''t the financial institutions have some huge part in this by offering adjustable rate mortgages and other shady financing that looked too good to be true, which lured people who had the dream of home ownership into situations that they were doomed to fail in? Then the buying frenzy drove prices up artificially? I know everyone seems to be arguing about oil for some reason...can someone shed some light on why the housing market is tanking?

I just bought my first home, but bought something modest that I could afford. I don''t understand why someone would get an "interest-only" mortgage, or I''ve seen those ads that say "get a $350,000 mortgage for $1000 a month." It just doesn''t make sense!

[aggiekat2004]

Credit Card companies need to be more closely regulated. Period.

Also, has anyone here heard of the outrageous LEGAL interest in pawn shops? I''m here in Texas, and I know someone who''s been hocking things to pay the mortgage. However, the pawn shops have LEGAL 240% APR on loans...20% per month.

Doesn''t this prey on the people who can least afford it? I don''t see the upper middle class hocking things, but instead being able to take out loans (I just got a used car loan at 7.4%), but someone who can''t afford to buy food or make ends meet is being charged 240% interest in the biggest scam on the face of the earth? (Look up "pawn shop interest rate texas" in Google to see...

[tburzio]

Banks were told to offer loans to risky customers by the Congress. I have no sympathy for someone who overextends themselves because they are greedy.

[afsc30574]

"Metro Areas Face Billions Of Dollars In Lost Economic Activity Next Year..." and they deserve it for failing to restict new housing to responsable levels. Unfortunatly, the people in those Metro Areas are the ones now facing the problem. This is a the problem in minature that we will be facing in New Mexico & Arizona thanks to irresponsible governors like Bill Richardson.

[usayesterday]

There are still mortgage rates to be reset, (higher), there are still higher oil and gas prices on the near horizon, and there are still many foreclosures yet to occur.

The full effects of all of these pressures on the middle class (90% of Americans) have yet to come full circle. The Christmas/holiday shopping season may be slower than expected, but next year it may be downright disastrous. (But hopefully not)

[eastprophet]

GIULIANI MISUSING 9/11 LEGACY
Hundreds of FDNY Firefighters and family members of people who died during the 9/11 tragedy have formed a group known as 9/11 Firefighters and Families. The group intends to follow Guiliani around the country in an effort to inform the public that Rudolph Giuliani is not a hero. The head of the group, FDNY Fire Chief Jim Riches, recently told MSNBC, "We are going to follow him around and tell the true story of what happened on 9/11 because he seems to have declared himself ''Mr. 9/11'' and I disagree with him for many reasons. We want to let the public know that Rudy Giulliani is not ''Mr. 9/11''. He''s not a hero. He ran that day." When asked if he felt that his views reflect those of the majority of FDNY Firefighters, Riches said, "Well I can tell you. I''m an active Chief and I work in the fire house, and you''ll hear a four letter word after his name, and it''s not ''hero''... He failed us on many counts. We didn''t have radios that worked that day. We had no unified command. We had no inter-agency drills. We didn''t have OEM, which was incompotent and useless that day. We had self-evacuation requests, and people were being told to stay in place right up until the second tower fell... all of his commisioners in there were either incompotent or unqualified. He made a Fireman the Fire Commisioner, a Police Officer the Police Commissioner, and OEM Director who was a Fire Dispatcher, and they made decisions that day that were fatal." therealrudy.org

[westprophet]

GIULIANI GIVES AID TO AL QAEDA
How much exactly would it cost to get Rudy Giuliani to holster his overdone 9/11 sanctimony? The government for the tiny Persian Gulf nation of Qatar might have a good idea. Following earlier reports that Giuliani was still getting paid by a consulting firm he created, Giuliani Partners LLC, Mary Jacoby of the Wall Street Journal sheds light on some potentially problematic sources of Giuliani''s private income. Chief among them is Qatar, the U.S. ally that paid Giuliani Partners for "security advice" regarding their petroleum facilities. The article uncovers a "potential political pitfall" for Giuliani''s candidacy and image given Qatar''s poor record in fighting Al Qaeda, and addresses aspects of the business arrangement that could dog Giuliani during his quest for the presidency. Specifically, the ostensible chief consumer of Giuliani''s security advice in this case would be Qatar''s Internal Security Ministry, currently headed by a known Al Qaeda associate. As reported earlier this year, Qatar Interior Minister Abdullah bin Khalid Al-Thani has long had ties to top Al Qaeda operatives including Osama Bin Laden, and is believed by many U.S. officials to have personally arranged the narrow escape of Al Qaeda big-wig Khalid Sheikh Mohammed from U.S. agents in 1996, thereby ensuring his freedom to mastermind the 9/11 attacks. Giuliani has refused to release specifics of the case, and to-date remains on the firm''s payroll.

[southprophet]

RON PAUL WILL RESTORE U.S. SOVEREIGNTY
All of the trade deals and world government organizations, which all of the presidential candidates support (except Ron Paul), such as the ICC, NAFTA, GATT, WTO, and CAFTA, are all a major threat to our nation''s sovereignty. They transfer power from our government to unelected foreign elites. The ICC wants to try our soldiers as war criminals. Both the WTO and CAFTA could force Americans to get a prescription to take herbs and vitamins. The WTO has forced Congress to change our laws to meet their needs, and not our own. If anything, the WTO makes trade relations worse by giving foreign competitors a new way to attack U.S. jobs. The NAFTA superhighway, being built by a Spanish company, is just one part of a plan to erase our borders and create the North American Union, a single nation State like the EU, out of Canada, the U.S. and Mexico, with a new, unelected bureaucracy and money system. Forget about controlling immigration under the NAU scheme. There won''t be any borders anymore, or a free America. Our limited, constitutional government will be gone forever. Let''s not forget the UN either. It wants to impose a direct Carbon Tax on us. Ron Paul successfully fought this move in Congress last year, but if we are going to stop ongoing attempts of this world government body to rule over us, we need someone in the White House who knows how to say "No." We must withdraw from any organizations or treaty that infringes upon our nation''s sovereignty.

[eastprophet]

WERE HAVING A TEA PARTY! YOU''RE INVITED
As we all know, freedom isn''t free in this country. Therefore, in the wake of our successful fundraising event of November 5th, in which we all came together to raise $4.2 million dollars for Ron Paul''s campaign, we''ve set yet another date for an even bigger fundraiser. This one will take place on December 16th: a very important date for people who love freedom and hate tyranny to ring the Liberty Bell, and let our sold-out, globalist, political ****** and their mainstream media enablers know that good Americans are mad as hell, and that we''re not going to take it anymore. December 16th is the 224th aniversary of The Boston Tea Party: an act of protest by the American colonists against the tyranny of Great Britain where the Sons of Liberty boarded British ships and dumped crates of tea overboard into Boston Harbor. It was a key event which helped to spark the American Revolution, and we hope this event will, likewise, add additional spark to our own 21st Century political revolution to restore peace, prosperity and freedom to our Republic by helping elect a President whose record of adherance to The Constitution is unmatched by anyone in American politics. Please join us this December 16th for the largest one-day political donation event in history. Our goal is to bring together 100,000 people to donate $100 each, creating a one day donation total of $10,000,000. The time to act is now. The time for Ron Paul is NOW! TeaParty07.com

[westprophet]

YOU LIVE IN INTERESTING TIMES
America is tipping way too far back in her easy chair. Something BIG is about to happen, and I predict this upcoming 2008 Presidential Election will be extremely pivotal. I''m not going to name any candidates. You probably already know who my favorite one is. But let me make my point absolutely clear: If you think times are boring, think again. If you think the future is predictable, think again. My advice to everyone who reads this is to be thoughtful. Trust only that wisdom which is your own. 90% of mainstream media in this country is controlled by fewer than 20 different organizations. Unfortunately, they, like the sold-out political ****** who pretend tp serve us in Washington, were bought and paid for by the military-industrial complex decades ago. Therefore, mainsteam media will paint pictures they want to paint, and people will open their minds to pictures they want to see. So, be skeptical. Be wise. Research issues and talking points on your own, and share what you learn with those you love. The future of your family tree may lay in the balance.

[southprophet]

RON PAUL IS THE NEW WAY
What we need is a President who will show us the way. Not the old way. Not the same way, but a NEW way. Think about this for a minute. What if we pulled all of our troops out of South Korea? They''ve been there for 50+ years. What if we quit worrying about Iran, but instead, realized that its having a nuclear weapon will not mean the end of the world? What if we pulled all of our troops out of the Middle-East, and brought them all home? What if we realistically addressed the National Debt, and paid attention to REALLY DOING SOMETHING about stopping illegal immigration? These are the ideas of Presidential candidate, Ron Paul. He''s a ten term Congressman and a physician who has delivered over 4,000 babies. He''s an intellectual who''s published four books, three of which are devoted entirely to sound economics and one to foreign policy. He was raised on a dairy farm in Pennsylvania as a pious Lutheran, but now he attends a Baptist church. Paul is given to mulling things over morally. Whenever he recollects the helicopter pilots he treated as an Air Force Flight Surgeon (Captain) during the Vietnam War, a war which he now says was "totally unnecessary and illegal," he laments, "They were gung-ho. I''ve often thought about how many of those people never came back." Candidates with the high level of personal integrity and proven track record of adherence to The Constitution, Congressman Paul has always demonstrated only come around once in a lifetime, if we''re lucky.

[frankly6]

Don''t worry people...the trickle in Bu$h''s trickle down economics is coming. Just wait...it''s coming. We just need to keep giving huge tax breaks to billionares and oil companies. It''s coming...don''t worry.

Stop, take a deep breath and ask yourself, Since when does a mortgage company and a borrower work together? Oh, thats right, they work together when the borrower is HIGH UPPER CLASS by income standards. All of us middle class people just get lip service.

As for Ron Paul, he is still a republican and once in power will state ''Congress won''t let me do anything"

[drivelphobe]

Only the ones involved in creating this mortgage crisis are the one''s suffering. So be it. They deserve what they get. The rest of us can hold on and make some good investments when these greedy jerks are losing everything. I''d like to see housing prices fall by 75%, and rates go to 7% or more on the 30 year. The sooner the better.

[hypnotoad72]

Seems obvious, doesn''t it? No property = no property tax.

Meanwhile, organizations that hate pirates give the worst offenders sweet deals and the folks who say "get educated" know it''s cost prohibitive, except for the countries they''re giving away education to.

Offshoring indeed. Globalization? Not until the US standard of living meets the countries we''re offshoring too. Then we''ll be competitive.

[antoniof123]

This is sad but true when you have unregulated business or should I say voluntary compliance (yea right if you believe that one I have some land in the Everglades to sell). This was a bad experiment and unregulated businesses keep proving it more and more everyday.

Keep up the good work you morons until people get mad and take it out on you. Of course they are the ones who don''t believe it and ask why me.

[macusweil]

"As for Ron Paul, he is still a republican and once in power will state ''''Congress won''''t let me do anything"

Not so~ President Ron Paul will be loved by a large majority and have the backing of the American people like no other president since maybe JFK. His ideas are common sense and he will expose those in Congress hiding behind special interests or corporate greed.

Join the party!! www.teaparty07.com

[ianlou]

Want to save money?
Cut up all your credit cards and do all your shopping with cash only at "Sally Anne''s" (also known by some as the Salvation Army)

This way you can get great deals and you can be sure you are not buying a product straight off the boat from China.

[mollydtt]

I''m not sure that the American public can be trusted to think clearly about entering into mortgages. I knew that an adjustable rate mortgage was not for me, but obviously, everyone else knew better. This isn''t rocket science. Just 8th grade math skills.

[ov442]

Of course it will. Now that credit lending has tightened up and they''ve laid off thousands of people calling you to get you on the phone with a loan officer, there are much fewer Home Equity loans being made, which WERE going right into the economy by way of A) paying off credit debts and misc bills which paved the way to new spending.
B) bought a college education for many kids.... not now.
C) bought a new SUV.... not now.
D) made people feel comfy that they could go out to eat a lot and see movies, and events like dirt bike racing and bull riding, ballets, concerts, nascar, football, baseball.... not now.
economy slows because less money in the hands of consumers while cost of living skyrockets and takes more money out of the pockets of consumers for necessities like Heat, Electricity, gasoline, food. And right back into the hands of the richest, most predatory industry in the world.. the energy conglomerates that control you all like sheep.

[infidel_us]

It won''t ''sap'' those sanctuary cities any more than thousands of illegal aliens already do. Deal with it.

[mbcsmith]

george bush is a crackhead failure always was.
I sure hope All of the Conservative Lard worshiping idiots who voted for george lose their homes too.
Why buy when Rent is so much cheaper and your not stuck in a State like North Carolina (full of Lard worshipers) where the jobs just keep going,and going, and going. While Food prices keep rising.


--------------------------------------------------------------------------------

Posted by beecuster at 02:08 PM : Nov 27, 2007

Typical LIB hatespeach.

[shanev137]

The housing crisis....LOL...it hasn''t even started yet.

[samael2014]

''but homeowners and financial institutions have the ability to work together to contain the effects, said a report released Tuesday''

Who would have guessed, the same combination of greedy pie-in-the-sky live-the-American-Dream-as-long-as-it''s-not-at-my-expense big spenders and severely under regulated profiteers who created this fiasco, will also go through a personality change and fiscally take full free-market accountability and responsibility for their temporary lapse in unregulated judgement.

[lochlan-2009]

"Foreclosures Will Sap U.S. Cities"

That''s because the real estate guru''s were working with the banking elite to sell their artificialy inflated houses to the poor and middle class, any number fudging way they could. The Fed lowered the interest rate to 1% and were allowing people to come in with APR loans knowing full well, how could it possibly be cut any lower. Then it just started to get rediculous with interest only loans and, right at the end, I even heard a 50 year loan plan. No government intervention was not an accident. The bankers, government REPRESENTATIVES (D.C. meaning of representation) and real estate elite knew exactly what they were doing... passing the buck to the poor and middle class. Now it''s time to bring in the nets and see how many fish they caught. Foreclosure companies are lurking in the shadows. As quietly as they can, they are sucking up these peoples hard earned money for even more profits.

If you vote GOP, your intelligence is seriously in question. Don''t think Hillary isn''t just more of the same, either.

[bill1fj]

Leave it alone.
The prices will drop.
Eventually the market will level off.
And then it will rise again.
These cycles just keep going on.
Its just a little worse this time because so many people overloaded themselves.

[facts6]

Flippers/Investors took out ARMs and interest only loans. Remove those from the count and its more realistic. A poster was correct, its a market correction and its a good thing. I have a 30 yr fixed at 5.625% and am in no danger of losing my home. Buy what you can afford, it works.

[forthepeopl1]

UNTIL ALL AMERICANS WAKE UP TO THE FACT WE THE PEOPLE DO HOLD ALL THE CARDS, THEN AND ONLY THEN WILL WE THE PEOPLE CHANGE WASHINGTON, AS YOU CAN SEE THEY ARE ALL RUNNING AWAY NOW THAT THE HOUSE OF CARDS ARE FALLING.

WAKE UP AMERICA, IF YOU WANT CHANGE THEN LETS HAVE A AMERICAN TEA PARTY(REVOLUTION) AND TAKE ARE COUNTRY BACK. WE THE PEOPLE HAVE THIS OPTION, ITS IN THE CONSTATUTION, IF THE GOVERNEMNT IS NOT RESPONDING TO THE WILL OF AMERICANS, THEN ITS UP TO AMERICANS TO CHANGE IT..AND START OVER. CLEAN AND SIMPLE.

[ov442]

People Buying a home for living in, didnt do that much to boost the economy because those people now have a larger mortgage to pay. Thats been the same for 100 yrs. Most of them werent trying to get Balloon mortgages because they have to live there,who can pay a balloon payment unless you have big cash?

However, those low initial rate to balloon pmt mortgages were basically for the House Flippers market. Now those are being left to foreclosure when prices drop & profits arent there.

The major reason? easy home equity loans at low to high rates, Poured money into the economy like water.
The real affect of inflated housing prices came from People taking out HomeEq loans off their newly appraised home. This sent 10s of 1000s per customer into the economy by way of Paying for College tuition, new cars, paying off credit cards and loans freeing up more purchasing power, computers/electronics, new furniture, Home updates and remodeling (which fueled Home Depot, Lowes, and others like crazy)
All those things went right into the economy and boosted it in big chunks.
that never happened in the past.
This was a 1 time 10 yr period of rediculous boost that is now gone.
With Credit tightened like a vise, and many people that had gotten loans no longer able to, housing prices dropping to or even below mortgage values, it wont happen again in the near future if ever again.