Foreclosures Could Cost State $65B in Tax Losses

Publication: Newsday

Author: Ellen Yan


04/17/2008 - Three percent of New York homeowners -- or one in 32 -- could face foreclosure in the next two years or so because of a subprime loan, leading to an estimated $65-billion loss to state and local tax coffers, according to a report released yesterday by The Pew Charitable Trusts.

With estimates of national tax losses at $356 billion, that means New York would carry almost 18 percent of all losses. Fifty-two percent of all New York homeowners are expected to lose an average of $18,334 in property value, Pew said, while nationally, 43.5 percent of homeowners affected would lose an average of $8,771. Those estimates are from subprime loans made in 2005 and 2006.

Kil Huh, manager of Pew's Center on the States and one of the authors of the report, "Defaulting on the Dream," said projections on New York damages are big because of the state's high housing prices and high density, which means more homes' values are affected when a local house forecloses.

View Foreclosures Could Cost State $65B in Tax Losses on the Newsday site.

Pew is no longer active in this line of work, but for more information visit the Subprime Mortgages Project on PewHealth.org.

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