Senate Proceeding on Feb 28th, 2008 :: 8:55:41 to 9:00:30
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8:51:46 to 8:55:41( Edit History Discussion )
Speech By: Ron Wyden

8:55:26 to 8:55:41( Edit History Discussion )

Ron Wyden: mr. president, those borrowers were being lured into situations that the brokers fully well knew they were never going to be ail to able to meet. what we're looking at in a reset means when these

8:55:41 to 8:55:57( Edit History Discussion )

Gordon Smith: higher rates happens, what happens? and this chart is specifically designed to describe the reset problem. the adjustable rate mortgage currently scheduled to have re reset rates and what they're going

8:55:41 to 9:00:30( Edit History Discussion )
Speech By: Gordon Smith

8:55:57 to 8:56:15( Edit History Discussion )

Gordon Smith: to do no n. thames of the number -- the dollar value of mortgages that will reset in billions of dollars coming along here. get some sense of it. this problem will last far beyond 2008, i would point

8:56:15 to 8:56:36( Edit History Discussion )

Gordon Smith: out. as this chart shows even after the current subprime wave washes over us, we'll face serious problems with interest-only and option arm vietnams for the next four years -- option arm resets for the

8:56:36 to 8:56:53( Edit History Discussion )

Gordon Smith: next four years. the crisis affects more than families who will lose their homes fl there will be increased demand for social services, police, fire, and other services that ameliorate the increases in

8:56:53 to 8:57:14( Edit History Discussion )

Gordon Smith: close ed and abandoned property. you don't have to have a ph.d. in housing to know when you have abandoned propertie and foreclosure ed properties that are not moving, what the ripple effect is of

8:57:14 to 8:57:30( Edit History Discussion )

Gordon Smith: to the community, the value of neighboring homes, even if the home is current, done everything right. you don't need to have -- be an expert in real estate to know that if your next-door neighbor

8:57:30 to 8:57:50( Edit History Discussion )

Gordon Smith: or people on that you are street street, there is an abandoned property there, that it causes the value of your home that you've taken caver, that you've done everything right by to decrease in value. so beyond

8:57:50 to 8:58:09( Edit History Discussion )

Gordon Smith: just the obvious problem here with a foreclosure ed property, there is a domino effect, if you will. yet state and local governments will have fewer resources, as we know, because as you have properties

8:58:09 to 8:58:29( Edit History Discussion )

Gordon Smith: foreclosure ed foreclosure nod paying taxes -- not paying taxes taxes, the social services also decline. that's what i wanted to show here, the foreclosure impocket impact on neighborhoods. the

8:58:29 to 8:58:47( Edit History Discussion )

Gordon Smith: value of each home located within 1/8 mile of a foreclosure foreclosured house will drop by anage of $5,000. this was a study done in ohio. they've done a study, mr. president, if you take a square block

8:58:47 to 8:59:02( Edit History Discussion )

Gordon Smith: which is roughly 1/ 1/8 of a square mile. within that square block one foreclosure occurs in that 1/8 of a square mile, then the property values of every other home in that block, that city block, even

8:59:02 to 8:59:16( Edit History Discussion )

Gordon Smith: though every other home is current in its mortgage obligations, its taxes, all the rest, the home values decline almost immediately by at lead $5 -- by at least $5,000. it's bad enough to lose the

8:59:16 to 8:59:31( Edit History Discussion )

Gordon Smith: one property but what's happening to everybody else in that neighbor neighborhood, is it's also suffering. that's what this chart here is designed to do. and the result of that is, the estimates are

8:59:31 to 8:59:50( Edit History Discussion )

Gordon Smith: that somewhere between 44 million and 50 million homes ajay adjacent to sub subprime foreclosure ed property ies will lose value in this country. and localities are going to le the estimates are somewhere

8:59:50 to 9:00:07( Edit History Discussion )

Gordon Smith: between $4.5 billion and $5 billion in property taxes and other tax revenues as a result of foreclosure ed properties. so the effects here go far beyond t individual that's adversely affected on these

9:00:07 to 9:00:30( Edit History Discussion )

Gordon Smith: issues. let me, if we can, as well here, we're seeing con contagion spread beyond the mortgage markets to the capital markets as a whole. the federal reserve chairman acknowledged at a banking committee

9:00:30 to 9:00:50( Edit History Discussion )

Ron Wyden: hearing this morning that our country is in a worse position to deal with this fall fallout of the housing and financial market crisis we're experience ing experiencing than we were after the

9:00:30 to 9:03:18( Edit History Discussion )
Speech By: Ron Wyden