U.S. Mortgage Crisis Slams Property Values, State Tax Receipts

The worst U.S. lodging recession
in 16 old age will drive down place values by $1.2 trillion next
year and cut down taxation gross by more than than $6.6 billion, according
to a study by the U.S. Conference of Mayors.

California, the hardest-hit state, volition endure a $630.6
billion lessening in place values that will cut place tax
revenue to local authorities by almost $3 billion, the study
found. The New House Of York City part will see the top lag in
the end product of commodity and services because of the mortgage crisis,
according to the report.

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

''The existent estate crisis of 2007 and 2008 will travel down in
the record books,'' according to the report, released as the
Conference of Mayors gatherings in Motor City today for a special
meeting to discourse the lodging slump. ''The moving ridge of foreclosures
that have rippled across the U.S. have already battered some of our
largest fiscal institutions, created shade towns of once
vibrant vicinities -- and it's not over yet.''

Subprime loans are made to borrowers with low recognition scores
or heavy debts, and have got the peak default rate. Those risks
increase with mortgages that offering low pressure ''teaser'' rates in the
early old age and then reset to higher rates that some borrowers
can't afford.

Slowing Growth

The 361 biggest U.S. metropolises will undergo a concerted loss
of $166 billion in economical growth, led by $10.4 billion in the
New York-Northern New Jersey area, according to the study. Los
Angeles is projected to decelerate by $8.3 billion, followed by $4
billion each in Dallas and American Capital and $3.9 billion in
Chicago.

Place values in Sunshine State are projected to worsen by $79.7
billion adjacent year, lowering property-tax gross by $589 million
and gross sales taxations by another $148 million. New York's property-tax
revenue may worsen by $686 million.

The National Association of Realtors said Nov. Twenty-One that home
prices drop in one 3rd of U.S. metropolises last one-fourth as stricter
lending criteria caused a 14 percentage diminution in sales
nationwide. The association said terms dropped in 54 of 150
metropolitan countries and the median value gross sales terms tumbled 2 percent
nationwide.

Homebuilding allows in the U.S. slumped in October to their
lowest since 1993, the Commerce Department said Nov. 20, and
construction of single-family homes tumbled 7.3 percentage to the
lowest since October 1991.

Spending Declines

As building wanes, so make related purchases such as as new
furniture and fixtures. Consumers also are cutting back on
spending financed by home-equity lines of credit. Both have
crimped state and local gross sales taxation revenue, the U.S. Conference of
Mayors' study said.

The collapse of the marketplace for chemical bonds backed by mortgages has
spurred U.S. Banks to take more than than $45 billion in writedowns
and fasten their loaning standards. Falling terms also have
made it harder to refinance or sell.

To reach the newsmen on this story:
Michael B. Marois in Capital Of California at .