Foreclosure Crisis Increasing At Alarming Rate
RateEmpire.com
The U.S Council of Mayors published a very upsetting report. This report informs about the impact of the ongoing problems of the housing market on member communities. This report was presented at a conference attended by several community groups and mortgage industry members.
Global Insights, who prepared the report, estimated that almost 361 Metropolitan areas of The United States faced severe losses. The projected Gross Metropolitan Product (G.M.P) was $166 Billion.
The United States is facing a major foreclosure crisis. The report indicates a very frustrating situation. It says that in the next year, 524,000 new jobs will be blocked because of this crisis. It also said that this crisis would invite a tax revenue loss of $6.6 Billion in ten states. 128 states will face a slow G.M.P rate next year, which can be less than 2%. In almost 65 metropolitans, the growth will go down, at least one third of the total amount. In other 143 areas, it can go down up to 25 %.
The report predicts that the mortgage situation will hit some big metropolitan cities also. New York has to face a giant loss of over $10 Billion in economic output. Other big cities like Los Angeles will lose $8.3 Billion, Washington $4.0 Billion and Chicago $3.9 Billion.
Detroit mayor Kwame Kilpatrick showed deep concern about the matter. He told all the participants that everybody is aware of the headlines and know what happened to Wall Street because of the impact. He also said that mayors were in the cutting edge situation everyday and the U.S constitution was aware of the problem and was trying to find out a solution. Actually the constitution is depending on all the participants for the solution.
He also stated that the foreclosure crisis is not only about the mortgages now. The other areas are also very badly affected on different other levels by this crisis. Many American cities now are looking at this problem as the most challenging and alarming issue.
The foreclosure can affect the home values badly. It is estimated that it will reduce home values by an additional $519 Billion in 2008. Foreclosures will rise by $1.4 Million in 2008. If the situation remains like this, then the series of downfall will be carried forward to the upcoming years.
Home prices will drop down 7% nationally and among all the cities California will secure the first position by loosing 16%. 10% cut down on home sales will occur next year. The mortgage crisis will affect the country’s economy growth next year. The growth rate will be 1.9%, which will be one point lesser than the estimated one.
A solution of this problem is proposed in the meeting. The proposed solution is a tie up between the mortgage bankers association and the Conference. This collaboration can start an online database. The local officials can spot the legal owners of foreclosed properties by this database. And in that case, a safety and health code can be enforced and the properties can be kept out from further problems.
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