Foreclosures Could Cost $25 Billion Next Year

The Chicago-area could see 11,260 subprime mortgage loans from 2006 go into foreclosure next year at a cost of $1.5 billion. New York City could see foreclosure costs of $580 million on 2,492 loans. For Memphis, 1,734 subprime loans from 2006 could be foreclosed next year at a cost of $150 million.

The numbers come from a new report from the activist organization ACORN using data available through the Home Mortgage Disclosure Act. The study, "Foreclosure Exposure II: The Cost to Our Cities and Neighborhoods" (http://acorn.org/index.php?id=12067) was released yesterday.

Nationwide, the foreclosure of subprime loans nationwide from 2006 could cost $25 billion next year, according to Acorn, the Association of Community Organizations for Reform Now.

Acorn studied data from 92 metropolitan areas, along with lists of 20 Census tracts in 44 counties that it expects to be hit with the greatest number of foreclosures.

The organization used a sample of 363 lenders owned by 19 of the largest banks in the country to check loan information. Acorn says its research found that these lenders accounted for more than two-thirds of all residential mortgages.

The study lists by city or metropolitan area the number of mortgage loans in danger of foreclosure and the possible cost to all the impacted parties impacted when a loan is foreclosed.

For example, Acorn estimates that for Chicago, individual homeowners would lose $81,073,613; lenders/investors would lose $799,894,166; local government would lose $216,500,327; and neighbor’s property would see lower values totaled at $486,644,361.

According to the first Foreclosure Exposure report the 10 metropolitan areas most at risk for subprime foreclosure are Memphis; Springfield, Ill.; Birmingham, Ala.; Jackson, Miss.; Detroit and Flint, Mich.; and McAllen, El Paso, Brownsville and Laredo, Texas.

Nationwide, there have been 1.6 million foreclosures through September, according to RealtyTrac, an online data tracker. In 2006, 1.2 million foreclosures were filed.