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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |  January 18, 2008  |   Withholding Mortgage Help Could Hurt Everybody
Many people have pooh-poohed the notion of helping families that can't pay their mortgages avoid foreclosure.

In a December CNN poll, for example, 51 percent of respondents said that borrowers had dug their own hole and now would just have to dig themselves out.

But the cost of tough love could be high.

Without any intervention, an estimated 3.5 million homeowners could default on their mortgages in the next 2˝ years, says Mark Zandi, chief economist at Moody's Economy.com, a West Chester, Pa. economic research firm. That's the equivalent of every family in both Dakotas, Delaware, Hawaii, Idaho, Montana, Nebraska, New Mexico and Wyoming losing their homes.

And for every 1 percent increase in the foreclosure rate, a neighborhood's violent-crime rate rises 2.3 percent, according to a study by Dan Immergluck of the Georgia Institute of Technology and Geoff Smith of the Woodstock Institute.

The Center for Responsible Lending, a consumer group, found that an increase of 1.1 million foreclosures would lower the prices of as many as 44.5 million homes by a collective $223 billion. "If we don't help homeowners having problems paying their mortgage, everyone's net worth is going to go down," says Zandi.

Source: Money, Stephen Gandel (02/01/2008)

Learn about NAR's efforts to mitigate subprime lending abuses and help troubled home owners.

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