At the end of the first quarter of 2008, there were an estimated 1.27 million properties in foreclosure in the United States. In addition, there were approximately 350,000 subprime mortgages and 330,000 prime mortgages more than 90 days delinquent where foreclosure proceedings had not yet begun. While Congress must continue to move forward with its commendable efforts to prevent future foreclosures, it must not lose sight of the negative impacts on local house prices, including losses in accumulated middle-class wealth built up through home equity.
The House and Senate have each passed neighborhood stabilization legislation to help states and localities stem the housing crisis by reducing downward pressure on local housing markets. The Senate version of the legislation provides $4 billion in grants while the House version provides $15 billion in a combination of grants and loans.
As the Senate funds are leveraged, we estimate nearly 120,000 properties would be purchased and rehabilitated. As for the House version, 140,000 properties would be purchased and rehabilitated.
The Senate version of the bill will generate an additional $8.6 billion in economic activity and create in excess of 80,000 new jobs; the House version generates $13.3 billion in economic activity and creates almost 125,000 new jobs.
The link below provides information for benefits for specific states based on conservative estimates of the House and Senate bills respectively: