Subprime loan foreclosures are having a spillover effect on communities, resulting in an estimated price tag for the nation of $223 billion, according to a new report.
The Center for Responsible Lending report cites Missouri as one of 24 states that each are projected to experience declines of more than $1 billion in local home values, which affects tax collections.
The study is one of the first attempts to distill the subprime-mortgage meltdown to a cost in the form of reduced housing values, which can create a ripple effect resulting in lower community revenues for schools, law enforcement, social welfare and other services.
“Subprime problems have become everyone’s problem,” Martin Eakes, the chief executive officer of the center, a nonpartisan research and policy organization, said Tuesday at a Washington news conference.
The study’s conclusions are underscored by statistics to be released today that show foreclosures on all loans nationwide have increased 100 percent from a year ago and 30 percent since June.
The Kansas City region, as is usually the case in such studies, fared relatively better than the national averages, even though foreclosures here also are up.
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