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Pew Charitable Trusts WASHINGTON, April 16 /PRNewswire-USNewswire/ -- One in 33 homeowners is projected to be in foreclosure primarily over the next two years, as a result of subprime loans made in 2005 and 2006, according to a new report released today by The Pew Charitable Trusts. In some states, the outlook is especially grim; for instance, nearly one in 11 homeowners in Nevada is projected to be in foreclosure and one in 18 Arizona homeowners may face the same circumstance over the next two years.
Homeowners being foreclosed upon may not be the only homeowners affected, according to data cited in the report. An additional 40 million neighboring homeowners may see their property values and their municipalities' tax bases drop by as much as $356 billion, largely over the next two years.
Defaulting on the Dream: States Respond to America's Foreclosure Crisis is the first-ever, comprehensive look at what all 50 states and the District of Columbia are doing to try to address the subprime mortgage fallout. The report finds that more often than not, states are at the forefront of developing policies and programs aimed at preventing more irresponsible loans from being made and improving residents' ability to stay in their homes. The report highlights states that are making headway to strengthen loan underwriting standards and help borrowers avoid foreclosure -- and underscores that any federal legislation must complement the work being done in the states, not compromise it.
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"Stronger standards from federal policy makers could have helped avert this crisis," said Shelley A. Hearne, Managing Director of Pew's Health and Human Services Program. "Future legislation must consider ways to strengthen standards to prevent more troubling loans from being made. Let's make certain federal laws build upon, rather than preempt, the strong and smart state efforts already underway and ensure that states retain flexibility to respond to local circumstances."
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Pew's research analyzes two principal data sets: the Mortgage Bankers Association (MBA) 4th Quarter National Delinquency Survey and the Center for Responsible Lending's (CRL) foreclosure projections and Subprime Spillover data. (CRL is a partner in Pew's Family Financial Security portfolio, which seeks to advance common-sense solutions to help Americans save for tomorrow and manage debt today.) Both data sets are widely cited and used to understand the nature and magnitude of the nation's foreclosure challenges. Researchers also conducted extensive interviews and used other data sources to identify state action to address the mounting foreclosure challenges facing the country.
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http://www.earthtimes.org/articles/show/1-in-33-homeowners-projected,354835.shtml