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Subprime Loan Foreclosures & Delinquencies versus Lender Workouts

September 23, 2008
Mortgage Lending

New Foreclosure and Spillover Projections

We now project that almost 2.2 million subprime foreclosures will occur primarily in late 2008 through the end of 2009, up from our original 1.1 million estimate made in 2006. Additionally we estimate that 40.6 million homes in neighborhoods surrounding those foreclosures will suffer price declines averaging over $8,667 per home and resulting in a $352 billion total decline in property values. These new projections—representing only property value declines caused by nearby foreclosures, not other price drops associated with the slowdown in local housing markets—are based on CRL research combined with data from Merrill Lynch, Moody's, and the Mortgage Bankers Association

Table 1: Projected Subprime Foreclosure Impact in U.S.


Subprime foreclosures expected to occur

(primarily in late 2008 through end of 2009)

2,164,000 homes lost

Spillover impact:


Surrounding homes suffering price declines caused by nearby subprime foreclosures

40.6 million homes

Decrease in home values

$352 billion

Average decrease in home value per unit affected


Download full report for projected foreclosures and spillover impact by state.