If home prices continue to fall, 2 million subprime mortgages could end up in foreclosure from 2007 through 2009, according to a report by Democrats who want to allow Fannie Mae and Freddie Mac to buy more mortgages. The report, issued by Joint Economic Committee Chairman Sen. Charles Schumer and other Democrats, estimated that $71 billion in wealth could be lost through foreclosures, and that the spillover effect of foreclosures could reduce the value of neighboring properties by more than $32 billion. As a result, state and local governments stand to lose more than $917 million in property tax revenue, the report said. The report -- "The Subprime Lending Crisis -- The Economic Impact on Wealth, Property Values and Tax Revenues, and How We Got Here" -- recommends increasing the Federal Housing Administration's ability to insure subprime mortgages, raising the loan portfolio limits of Fannie Mae and Freddie Mac, amending the bankruptcy code to help troubled borrowers keep their homes,...
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