Mayors target housing crisis
Mortgage group to help publicize ways to avoid foreclosure
Before Tuesday's gathering, the mayors' group released the report that said rising foreclosures will lead to billions of dollars in lost economic activity next year in the nation's major metropolitan areas. But it said homeowners and financial institutions have the ability to work together to contain the effects.
Among five metropolitan areas in Utah that were included in a report released by the U.S. Conference of Mayors, only the Ogden-Clearfield area was forecast to have any measurable economic impact from declines in the housing market.
The agreement between the mayors and the Mortgage Bankers Association was announced following a meeting in Detroit organized by the U.S. Conference of Mayors and attended by mayors from across the country. The association also plans to help cities get access to information on homes in foreclosure to ensure those properties don't blight neighborhoods.
"The foreclosure crisis has the potential to break the backbone of our economy," Douglas Palmer, mayor of Trenton, N.J., and president of the mayors group, said following the meeting at the MGM Grand Detroit hotel.
"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," the report said.
The biggest losses in economic activity are projected for some of the nation's largest metropolitan areas. New York is expected to lose $10.4 billion in economic activity in 2008, followed by Los Angeles at $8.3 billion, Dallas and Washington at $4 billion each, and Chicago at $3.9 billion. The Detroit area is No. 7 on that list, with $3.2 billion in lost economic activity.
The report estimates U.S. gross domestic product growth in 2008 will be 1.9 percent, coming in about $166 billion — or one percentage point — lower as a result of mortgage problems. GDP is the value of goods and services produced and is considered the best barometer of the country's economic fitness.
The report also projects property values will decline by $1.2 trillion in 2008, due in part to the foreclosure crisis, with drops in home prices across the U.S. averaging 7 percent. And it said the loss of property, sales and real estate transfer taxes will hurt local and state governments.
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