Mayors predict foreclosures will have dire impact on cities

Report urges lenders to engage in workouts with borrowers

Property values will decline by $1.2 trillion in 2008, denting consumer spending, property tax revenues, job creation and economic growth, according to an economic impact report released today by the U.S. Conference of Mayors.

Meeting in Detroit — one of the cities hit hardest by foreclosures — the group said that weaker market demand and large inventories of homes for sale would have reduced home values by $676 billion in 2008.