Congress tallies up subprime losses
Congress is projecting losses of over $100 billion in housing wealth from the subprime mortgage crisis, and not all of that comes from foreclosures. Jeremy Hobson reports a good chunk of loss comes from falling property values.
A foreclosure sign hangs in front of a home. (Getty Images)
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Doug Krizner: Today, Congress reports on the estimated costs of the subprime mortgage mess. Not just for the families facing foreclosure. For their neighbors who've seen property values decline. And for the state and local governments watching tax revenues dwindle. Jeremy Hobson has that story.
Jeremy Hobson: The Joint Economic Committee report says over $100 billion in housing wealth will be lost by the end of next year. And fully a quarter of that will not be from foreclosures, but from falling property values.
And then, there's the issue of state and local taxes. The report says when all is said and done, tax revenue losses around the country will be in the hundreds of millions of dollars.
No surprise to finance Professor Anthony Pennington-Cross of Marquette University:
Anthony Pennington-Cross: There's a cost borne by all the local municipalities when a property does go through foreclosures, and that cost can be quite high.
Sussex County Delaware, for instance, has seen a 23 percent drop in one of its main sources of real-estate tax revenue in the last year.
Still, the county's finance director, Susan Webb, says for now, it remains more an annoyance than a crisis:
Susan Webb: I think it will level off somewhere in the middle. Hoping, anyway.
In Washington, I'm Jeremy Hobson for Marketplace.
