Black Box Report

A rising tide of foreclosures threatens to "break the back of our national economy." That's the headline of a report compiled by the U.S. Conference of Mayors, released ahead of today's meeting in Detroit.

The report titled "The Mortgage Crisis: Economic And Fiscal Implications For Metro Areas" said: “The wave of foreclosures that has rippled across the U.S. has already battered some of our largest financial institutions, created ghost towns of once vibrant neighborhoods - and it's not over yet."

The biggest losses in economic activity are projected for some of the nation's largest cities.

New York tops the list and is expected to lose almost $10.5 billion in 2008.

The report also projects property values will decline by more than a trillion dollars in 2008, due in part to the foreclosure crisis.

But all hope is not lost - the mayors recommend homeowners, banks, securities firms, and loan services can work together to ease the economic effects - for example agreeing to new payment terms.

Late today: the mortgage bankers association agreed to help the nation's mayors raise public awareness about ways to avoid falling into foreclosure.

"Such actions will help to lessen the number of foreclosures thereby avoiding the further negative effects on local housing markets and on the broader economy."

Trenton, NJ mayor Douglas Palmer - said: "We're coming to Detroit with a dogged determination to fight for the families in our cities, our cities and the national economy... We're optimistic that we're going to come up with models that will work."

For the past seven years, in an ever changing world, one thing has remained constant - the deeper the pockets, the bigger the breaks. Where this left the middle class is squeezed, a precarious spot now downright petrifying considering the mortgage mess.

This much I know, the one thing most Americans had was their home. When your principal asset is so inflated in value in a housing market, almost designed to delude both buyer and seller, when that asset goes kaput where do you go? For too many, the answer is anybody's guess.

Consider the story of a retired widow outside of Chicago. Convinced to refinance her mortgage a few years ago - she spends her entire monthly fixed income to pay a mortgage she can no longer afford. Going without her medications, even food - she knows the knock on the door from the bank or even the cops is coming - it's only a matter of how soon.

Foreclosure fear is gripping her and more than a million other homeowners, and the consequences - beyond the human cost, will be staggering for countless communities. As our guest just said, this is a problem only in its infancy - when it matures, all of us, including the ones who can still afford our mortgages - will pay a price.