Today's Local Real Estate News: "We are headed for billions in lost wealth."

The Congress, which once touted record homeownership as a great achievement during the boom, is now suddenly concerned with the aftermath of those records. The L.A. Times reports:

“About 2 million sub-prime borrowers could lose their homes to foreclosure through 2009, costing them $71 billion in housing wealth, a congressional report said Thursday.”

“Sub-prime foreclosure rates will increase as housing prices stagnate or decline, and the effects of the sub-prime mortgage crisis may spill over to the broader economy, according to a report by the Joint Economic Committee released in Washington.”

“‘State by state, the economic costs from the sub-prime debacle are shockingly high,’ said Sen. Charles E. Schumer (D-N.Y.), who heads the committee. ‘From New York to California, we are headed for billions in lost wealth, property values and tax revenues.’”

“The report spotlights the foreclosure threat facing borrowers with poor credit as interest rates on adjustable loans reset to higher levels. Sub-prime foreclosures will total about 2 million between 2007 and 2009 if housing prices drop 20% over those three years, the report said.”

“About 1.3 million of the nation's 7.4 million sub-prime borrowers will face foreclosure between this year's third quarter and the fourth quarter of 2009, the report said.”

“California, Florida, Ohio, New York and Texas will be among the hardest-hit states. Sub-prime loans represented 14% of all outstanding U.S. mortgages as of the second quarter of 2007, the report said.”

Following this report, MSNBC got the views of Congressional Democrats on the developing crisis:

“Congressional Democrats are pressing for Fannie Mae and Freddie Mac, the government-sponsored mortgage companies, to be given a bigger role in helping struggling borrowers refinance mortgages. However, the proposal is opposed by the administration, which advocates a more limited government response to the crisis.”

“‘If there was a less ideological president, the business community would be happier because there would be much more confidence that somebody was dealing with this,’ said Mr Schumer. A Treasury spokesman dismissed Mr Schumer's criticisms as ‘ridiculous’, saying: ‘The secretary and the president have both called on the senate to take up legislation to help struggling homeowners - it's the Senate that seems to be handcuffed.’”

“Democratic calls for great­er intervention in the mortgage markets fit the party's push for ­govern­ment-led so­lutions to ease the growing sense of economic insecurity in middle class America.”


The Sun-Sentinel gave further details on the boating industry’s troubles in the wake of the housing downturn:

“There will probably be fewer boat builders and brokers around for next year's Fort Lauderdale International Boat Show.”

“‘We're going to see this industry ... shrink, with fewer manufacturers and dealers,’ particularly in the small to mid-size markets, said Irwin Jacobs, chief executive officer of Minneapolis-based Genmar Holdings Inc., one of the globe's biggest recreational boat builders.”

“The dried-up housing market, soaring gasoline prices and the credit crunch are keeping boat buyers at bay, with analysts reporting drops in sales by as much as 15 percent. Several large manufacturers and dealers, including Brunswick Corp. and Marine Max, have cut production and laid off workers.”