Foreclosures hurt the neighborhood
Aside from borrowers and lenders, neighborhoods are also feeling the subprime burn. Steve Henn reports Congress is considering a new bill to let local governments buy abandoned sites to save neighborhood property values.
New homes, some occupied and some yet to be sold, in Rancho Cucamonga, CA. (David McNew/Getty Images)
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TEXT OF STORY
Renita Jablonski: Congress is working on a bailout for hundreds of thousands of homeowners to refinance loans with government guarantees. But what about cities and counties hard hit by the mortgage meltdown? Congress takes that question up today, as Steve Henn reports.
Steve Henn: It's not just borrowers or Bear Stearns who have taken a beating in the subprime mortgage mess.
Phyllis Betts: The impact of foreclosures on neighborhoods is debilitating.
Phyllis Betts teaches Urban Planning at the University of Memphis, and she's studied what foreclosures are doing to property there.
Betts: It's become quite clear that foreclosures are driving blight. Our hardest-hit areas actually are middle-class neighborhoods.
Neglected, foreclosed houses are driving property values down across entire neighborhoods.
House Democrats passed the Neighborhood Stabilization Act earlier this month. That would give local governments billions to buy up abandoned properties. But the Bush administration has called the bill a bailout for lenders.
The House is holding a fresh round of hearings, including one today, in hopes of winning enough new support to override the president's promised veto.
In Washington I'm Steve Henn for Marketplace.
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