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EV_Ares Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 08:59 AM
Original message
U.S. Mortgage Crisis Slams Property Values, Revenue
Nov. 27 (Bloomberg) -- The worst U.S. housing recession in 16 years will drive down property values by $1.2 trillion next year and slash tax revenue by more than $6.6 billion, according to a report by the U.S. Conference of Mayors.

California, the hardest-hit state, will suffer a $630.6 billion decrease in property values that will cut property tax revenue to local governments by almost $3 billion, the study estimated. The New York City region will see the greatest slowdown in economic output because of the mortgage crisis, according to the report.

The U.S. residential real estate market is faltering as rising foreclosures among subprime borrowers have pushed down prices and led to a record supply of unsold homes. Foreclosures among homeowners with subprime adjustable-rate mortgages have reached a five-year high.

``The real estate crisis of 2007 and 2008 will go down in the record books,'' according to the report, released as the Conference of Mayors gathers in Detroit today for a special meeting to discuss the housing slump. ``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.''

Subprime loans are made to borrowers with low credit scores or heavy debts, and have the highest default rate. Those risks increase with mortgages that offer low ``teaser'' rates in the early years and then reset to higher rates that some borrowers can't afford.

Link to article: http://www.bloomberg.com/apps/news?pid=20601087&sid=atg...

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spanone Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 09:00 AM
Response to Original message
1. bu$h* is set to leave the country a Katrina Economy
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RB TexLa Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 09:02 AM
Response to Original message
2. And of course those of us with good credit who pay our bills and buy houses we can afford will have

make up the difference. Oh well, one of the costs of being responsible is having to pay for the irresponsible.
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Sock Puppet Donating Member (624 posts) Send PM | Profile | Ignore Wed Nov-28-07 09:12 AM
Response to Reply #2
4. the point is that this predatory lending was allowed, even encouraged
But you go ahead and feel smug.
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RB TexLa Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 09:15 AM
Response to Reply #4
5. No smugness about it. We've only done what we were supposed to do.

We bought a house we could afford. We pay our bills, which keeps our credit ratings good. These are things you are supposed to do, nothing smug about it.
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Sock Puppet Donating Member (624 posts) Send PM | Profile | Ignore Wed Nov-28-07 09:18 AM
Response to Reply #5
6. you and your wife have decent paying jobs
lucky you.

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EV_Ares Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 09:25 AM
Response to Reply #4
7. You are correct. The mayor of Louisville was on NPR yesterday
and talking about this crisis. Property values, tax revenue plus the cost of the taxpayer having to take care of all the vacant properties and extra police with so many vacant houses in some neighborhoods of which many now are middle class areas. He said they can't even find the holder of the paper on some of these houses because of being bundled up and sold and resold so money can be made on them in the form of bonds, etc. They have had meetings, various mayors of cities to try and see how they are going to handle this because the burden on the cities has even reached the point for some where their credit rating is being dropped.

Of all people who refused to attend or have not even acknowledged they are going to sit in on any of these sessions is Wall Street. Like he said, they are the ones who have made money on these sub-prime loans and these loans were sold to people who were misled, who didn't understand what they were getting into and some of the people who sold them didn't really understand them either. It is one big mess to get out of now and a lot of people are going to suffer.
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CountAllVotes Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 09:11 AM
Response to Original message
3. my cousin owns a house in the Bay Area
Edited on Wed Nov-28-07 09:11 AM by CountAllVotes
the price has dropped 20+% already. It is a POS anyway and the price managed to work its way up from about $200,000 to over $700,000 :nopity:

:dem:
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Angela Shelley Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Nov-28-07 10:23 AM
Response to Original message
8. Now we can privatize the cities!
Im currently reading "The Shock Doctrine" by Naomi Klein.

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