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11.3 million homeowners underwater on mortgage
MarketWatch ^ | Feb. 23, 2010 | Rex Nutting,

Posted on 02/24/2010 2:58:14 PM PST by george76

More than 11.3 million homeowners -- nearly one-fourth of all Americans with a mortgage -- owe more on their loan than their home is now worth...

More than 10% of people with mortgages owe 25% more than their home is worth.

The number of underwater mortgages increased by about 620,000 from the third quarter... Another 2.3 million mortgages had less than 5% equity in their home, which could be wiped out if home prices fall further.

Underwater mortgages are concentrated in few states: California, Florida, Nevada, Arizona, Michigan and Georgia. In Nevada, 70% of mortgages were underwater. In California, more than a third of mortgages were underwater.

(Excerpt) Read more at marketwatch.com ...


TOPICS: Crime/Corruption; Extended News; News/Current Events; US: Arizona; US: California; US: Florida; US: Georgia; US: Michigan; US: Nevada
KEYWORDS: housingmarket; mortgages; obama; obamanomics; underwater; unexpected
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1 posted on 02/24/2010 2:58:14 PM PST by george76
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To: george76

“In Nevada, 70% of mortgages were underwater.”

Some friends of mine in Reno just went bankrupt and dumped their condo. Approx. $50,000 underwater. He was laid off recently, too.


2 posted on 02/24/2010 3:01:50 PM PST by dynachrome (Barack Hussein Obama yunikku khinaaziir!)
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To: george76

These people wouldn’t be complaining if their homes would be worth MORE than they owe.


3 posted on 02/24/2010 3:02:31 PM PST by bergmeid (Gas up the truck and pedal to the metal!)
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To: bergmeid

Yes the banks weren’t complaining either when they were artificially inflating property values.


4 posted on 02/24/2010 3:05:29 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: bergmeid

“These people wouldn’t be complaining if their homes would be worth MORE than they owe.”


Wasn’t that what they used to call equity? :-)

C’mon home values will ALWAYS rise you know that....:-0


5 posted on 02/24/2010 3:05:29 PM PST by CommieCutter ("You wanted the presidency, you got it, now FIX THE DAMN ECONOMY!!!!" ----YankeeReb)
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To: bergmeid

Good point. Mine is paid off but worth less now than two years ago. I doubt that will make the news.


6 posted on 02/24/2010 3:05:31 PM PST by pfflier
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To: george76

Well,one thing’s for certain...the days of the 0% down mortgage are over.Which is fine by me,at least partially because the last time I applied for a mortgage the standard procedure was 20% down.


7 posted on 02/24/2010 3:08:10 PM PST by Gay State Conservative (Host The Beer Summit-->Win The Nobel Peace Prize!)
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To: pfflier

Because you are responsible - you need to pay more in taxes. It is only “fair” to everyone else and it is the “patriotic” thing to do according to Biden.


8 posted on 02/24/2010 3:08:24 PM PST by Frantzie (TV - sending Americans towards Islamic serfdom - Cancel TV service NOW)
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To: Gay State Conservative

Totally agree. These BS 1% or 5% down or nothing down and you get cash back nonsense plus ARMs with teaser 1% rates were a disaster waiting to happen.


9 posted on 02/24/2010 3:09:18 PM PST by Frantzie (TV - sending Americans towards Islamic serfdom - Cancel TV service NOW)
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To: george76

based on REAL world values the number is much worse.

It is just there are people still able to pay these outrageos mortgages. (as in fraud in the inducement based on bank mandates apprasals)

Banks no longer make public their home apprasal formulas.


10 posted on 02/24/2010 3:09:52 PM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: george76

The effect of the real estate depression can extend well beyond the borders of the states in which the property is located.

Most of the distressed properties in my FL beach community are owned by Georgians. Most of them are from the greater Atlanta area. Several have been recently sold by banks for 10-15 cents on the dollar to the purchase price in 2005-2006. No kidding.


11 posted on 02/24/2010 3:10:40 PM PST by Jacquerie (Support and defend our Beloved Constitution.)
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To: bergmeid

neither would banks.

Their execs would be buying the homes fro their own use.


12 posted on 02/24/2010 3:10:50 PM PST by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: george76
More than 10% of people with mortgages owe 25% more than their home is worth.

Which would only be a problem if they had a reason to sell soon... otherwise, it makes ZERO difference.

13 posted on 02/24/2010 3:11:04 PM PST by Cementjungle
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To: Gay State Conservative

My wife and I lived on noodles for a year to save the 20% down required to buy our first home.

Others can eat noodles too.

I don’t anymore.


14 posted on 02/24/2010 3:11:19 PM PST by TSgt (RE-ELECT NOBODY - VOTE THEM ALL OUT!)
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To: Jacquerie

You’ve got that right ,, beachfront is being dumped ,, the banks have to lay out real serious cash to pay insurance and taxes ,, they can’t afford it.


15 posted on 02/24/2010 3:15:26 PM PST by Neidermeyer
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To: Gay State Conservative

I am gonna argue the other side of the coin. I wouldn’t want to put 20% down on a house now. I will go to whatever length the mortgage company wants to verify my income and credit ... but they are not getting 50 grand off me in this market.


16 posted on 02/24/2010 3:20:16 PM PST by dartuser ("Palin 2012 ... nothing else will do.")
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To: Frantzie
As a "DINK" couple we have been "fair" for many years. We have gotten stuck on taxes every year because we do not qualify for credits people with children get. We also have had to endure the marriage penalty.

"Fair" sucks.

17 posted on 02/24/2010 3:21:33 PM PST by pfflier
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To: dynachrome

Sorry about your friends.

Property taxes are still going up as house values are going down.

Worse next year.


18 posted on 02/24/2010 3:22:44 PM PST by george76 (Ward Churchill : Fake Indian, Fake Scholarship, and Fake Art)
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To: Gay State Conservative
I applied for a mortgage the standard procedure was 20% down.

There are plenty of those underwater who did put down 20%. Unfortunately, the market went down 50%.

19 posted on 02/24/2010 3:26:02 PM PST by AmusedBystander (Just when I think Obama can't get any worse, he surprises me and does.)
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To: Cementjungle
Which would only be a problem if they had a reason to sell soon... otherwise, it makes ZERO difference.

Good point! I always figured people bought homes to live in them. Surely they can't have become so much less livable in so short a time.

For those who bought homes merely to sell them in a few years and make a profit, well that's a different story altogether. I haven't a drop of sympathy for SPECULATORS. The music stopped and you couldn't find a chair? Here's a dime. Call someone who cares.
20 posted on 02/24/2010 3:26:16 PM PST by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: george76

Screw them, they made a bad investment and have no one to blame but themselves.


21 posted on 02/24/2010 3:27:28 PM PST by trumandogz (The Democrats are driving us to Socialism at 100 MPH -The GOP is driving us to Socialism at 97.5 MPH)
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To: Cementjungle
Which would only be a problem if they had a reason to sell soon... otherwise, it makes ZERO difference.

*************************************************

You don't get it ,, there are always reasons to sell ,, a new job in another city , divorce , roof needs replacement and you're 100k upside down , need bigger house etc. etc. The banks have about 7 years of inventory RIGHT NOW and will have 9 years of inventory at the end of this year ,, prices are going nowhere but down, Orlando pricing dropped 14% in Jan 2010 alone!! try buying anything in that environment when you have to give an otherwise accurate appraisal a 20% haircut just to cover a 45 day period going into closing. Real life example ,, house refi'd at peak with 25% down/equity is negative with mortgage at 155% of current pricing ,, using standard ammort tools I see that it will take 17 years of payments to get down to even money ... will that person walk? You Betcha! Will that affect you? You Betcha! In Florida anyone who is underwater can stiff the bank with jingle mail and rent a bigger house for a MUCH lower payment and have no repair costs or hurricane insurance costs.

The "it doesn't matter" argument is just as stupid as hearing someone holding a worthless stock certificate in a bankrupt company say "It's just a paper loss" DUH! and that paper was a suitcase of $100's .

22 posted on 02/24/2010 3:29:00 PM PST by Neidermeyer
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To: pfflier

“Dinks”

I understand your being Pi$$ed off about the BS tax breaks and other credits allowed for “fruit of some ones loins” at your, (and my) expense.

I have also grown to not give a damn about anyone’s children. Go anywhere in public and see the results of folks who should not breed!


23 posted on 02/24/2010 3:30:56 PM PST by tiger63
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To: AmusedBystander
There are plenty of those underwater who did put down 20%. Unfortunately, the market went down 50%.

I suppose that in some parts of the country prices did go down 50%.Apart from Detroit,those 50% drop areas tended to be the areas that,before,saw 50% (or more) *increases* in value....California...Nevada....Florida...and perhaps other areas as well.I bought at the very top of the (local) market and I figure that my place has dropped by about 25%.

24 posted on 02/24/2010 3:32:34 PM PST by Gay State Conservative (Host The Beer Summit-->Win The Nobel Peace Prize!)
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To: george76

Get rid of that marxist in the WH and things will change rapidly. Probably quick enough for the homeowners to wait it out....with a little cooperation from their lenders.


25 posted on 02/24/2010 3:36:02 PM PST by himno hero
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To: trumandogz

Screw them, they made a bad investment and have no one to blame but themselves.
*******************************************************
During the boom rental properties were scarce and pricey supporting sales at inflated prices,, bad decision? YES ,, but the blame for the most part goes to the FEDS and Wall Street ,, this was an irresistible avalanche of cash for them while they inflated the bubble.


26 posted on 02/24/2010 3:36:12 PM PST by Neidermeyer
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To: Jacquerie

A boatload of out of state money has been lost in the NC resort market, both mountains and beach. The worst hit were folks who bought vacant lots in gated communities where the developers went tatas-up. One on the coast sold lots for $350K back in 2006-2007. There’s over 50 lot foreclosures in that development for sale now at around $20,000 each.


27 posted on 02/24/2010 3:38:19 PM PST by Rebelbase
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To: Neidermeyer
The "it doesn't matter" argument is just as stupid as hearing someone holding a worthless stock certificate in a bankrupt company say "It's just a paper loss"

That analogy would fit if these houses in question were becoming worthless and the homeowners becoming homeless as a result. But they aren't.

A better analogy would be someone who holds stock in a solid company, but the going price has dropped. You're only hurt if you're a SPECULATOR. Otherwise your investment in the company is still doing what it's supposed to. (Might be a good time to BUY instead of complaining about being unable to SELL.)
28 posted on 02/24/2010 3:40:49 PM PST by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: george76

Bought at the top of the market, it turned out, with minimal down payment. Seemed like a good idea at the time.


29 posted on 02/24/2010 3:41:37 PM PST by dynachrome (Barack Hussein Obama yunikku khinaaziir!)
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To: george76
Why is everyone looking at homeownership in a short-term light? “Oh, I bought my house 3 years ago and it lost half the sale price!”... is the common thread.

People usually buy homes and get a 20/30-year mortgage to pay it off. They hope to live in the house for as much of that time as they can.

So, if the homebuyer *BUYS* the house with a view to the long-term, why aren't they looking ‘long-term’ as the end value of the house 20/30 years into the future?

This idiocy of buying a house for the long-term and then panicking because of short-term loss is ridiculous.

30 posted on 02/24/2010 3:51:40 PM PST by gogogodzilla (Live free or die!)
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To: longtermmemmory

No one put a gun to the homebuyers head and forced them to sign the loan. And no one has a *NEED* for a house, when renting is a viable option.

The buyers knew what they were getting... and if not, a fool and his money are soon parted.


31 posted on 02/24/2010 3:54:11 PM PST by gogogodzilla (Live free or die!)
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To: george76

ok... i guess i never knew that stat.

11.3m mortgages == 25% of all mortages?

so there are only 45m mortgages in the US? i knew the 110m household number... i guess the difference are renters??


32 posted on 02/24/2010 3:57:18 PM PST by sten
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To: Neidermeyer
You don't get it ,, there are always reasons to sell ,, a new job in another city , divorce , roof needs replacement and you're 100k upside down , need bigger house etc. etc. The banks have about 7 years of inventory RIGHT NOW and will have 9 years of inventory at the end of this year ,, prices are going nowhere but down, Orlando pricing dropped 14% in Jan 2010 alone!! try buying anything in that environment when you have to give an otherwise accurate appraisal a 20% haircut just to cover a 45 day period going into closing. Real life example ,, house refi'd at peak with 25% down/equity is negative with mortgage at 155% of current pricing ,, using standard ammort tools I see that it will take 17 years of payments to get down to even money ... will that person walk? You Betcha! Will that affect you? You Betcha! In Florida anyone who is underwater can stiff the bank with jingle mail and rent a bigger house for a MUCH lower payment and have no repair costs or hurricane insurance costs.

I DO get it... but would argue that a pretty high percentage of these "underwater" people are only in trouble because they overextended themselves and didn't figure on a market downturn. Yes, I know some folks have to move due to job relocation, divorce, retirement, etc... and I feel for them.

Having to bail out all the speculators on top of the folks who truly are in trouble is a problem in my mind... if you gamble with a variable-rate or interest-only loan then as far as I'm concerned you gambled... shouldn't be the taxpayer's problem.

33 posted on 02/24/2010 3:58:40 PM PST by Cementjungle
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To: Rebelbase
I hope that development is named Cannonsgate, lol, talk about your poetic justice for our former "governor," and I do use that term as loosely as he did.

Easley's going to do time, when it's all said and done. Maybe they'll chopper him off to Butner for old times' sake.

34 posted on 02/24/2010 4:02:58 PM PST by RegulatorCountry
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To: LearsFool

You buy , I’ll watch and laugh ... this isn’t over ,, not by a long shot.


35 posted on 02/24/2010 4:05:42 PM PST by Neidermeyer
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To: Gay State Conservative

“Well,one thing’s for certain...the days of the 0% down mortgage are over.”

Unfortunately they aren’t. In fact with tax rebates you don’t even have to pay closing costs.


36 posted on 02/24/2010 4:10:38 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Neidermeyer
You buy , I’ll watch and laugh ... this isn’t over ,, not by a long shot.

Not buying just yet, but I'm finally looking. You're probably right about it not being over. But as I posted elsewhere...

I’ve been on the Dave Ramsey Diet (beans&rice, rice&beans) for the past several years, debt-free and socking my money away, paying very low rent and looking forward to the day I could pay cash for a home. How discouraged I was when my taxes were used to prop up (artificially-high) home values. I was having to pay to be priced out of the market!

Now prices are coming back to reality, and my realtor is out bargain-hunting for me. Not investments; I’m no SPECULATOR. Whether the market price goes up or down after I buy, who cares. I want a home, not a poker hand.
37 posted on 02/24/2010 4:11:44 PM PST by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: Neidermeyer
Sorry, but anyone who managed to earn a C in a high school economics could see what was going to happen when the Fed kept lowering interest rates and the Congress and the presidents for the last 20 years kept pushing banks to lower mortgage standards.
38 posted on 02/24/2010 4:13:26 PM PST by trumandogz (The Democrats are driving us to Socialism at 100 MPH -The GOP is driving us to Socialism at 97.5 MPH)
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To: gogogodzilla

yeah, those homeowners should have known about the corruption taking place in the banks and financial institutions. They should have expected an intentional attack on our economy. Screw them!


39 posted on 02/24/2010 4:14:55 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: trumandogz

wow must be nice to be sooo smart. I bet you’ve never lost a job or suffered a serious medical issue.

a perfect life must be nice.


40 posted on 02/24/2010 4:17:52 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Neidermeyer
Many people think their problems will end with foreclosure. In FL, you still owe the amount on the promissory note. The effect of the burst real estate bubble will resonate for decades.

My parents were children during the Great Depression. That and WWII were the defining events of their lives. While I do not equate the RE bust with the Great Depression or WWII, I suspect that the bust will have similar effects on many who will spend decades getting themselves out of debt. While paying debt they do not buy as many consumer goods and thus are something of a drag on an economy that relies on consumption.

41 posted on 02/24/2010 4:18:40 PM PST by Jacquerie (Support and defend our Beloved Constitution.)
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To: driftdiver

No, I was underwater in my home during the Texas real estate crash of the late 1980’s and lost my oil field job. However, I did not go whine about my problem and instead worked as a cabbie and a bartender until my industy rebounded and I kept our home.


42 posted on 02/24/2010 4:21:49 PM PST by trumandogz (The Democrats are driving us to Socialism at 100 MPH -The GOP is driving us to Socialism at 97.5 MPH)
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To: driftdiver
wow must be nice to be sooo smart. I bet you’ve never lost a job or suffered a serious medical issue.

a perfect life must be nice.


And here I though FReepers were all about self-reliance, being responsible, planning ahead for life's pitfalls instead of relying on Big Gov for bailouts - y'know, the things that made Americans fit for self-government. Was I wrong?

C'mon, FRiend, you don't have to read very far in Genesis to learn about fat years and lean years, and to find out what to do in the fat years. Or tune in Dave Ramsey's radio show sometime and learn about the "emergency fund".
43 posted on 02/24/2010 4:26:39 PM PST by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: tiger63
I did my taxes this year and went throught all the credit and deductions selections. I can only pick 2 deductions. My AGI doesn't change throughout the form.

Why not just make the form a three liner?

44 posted on 02/24/2010 4:30:09 PM PST by pfflier
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To: gogogodzilla

Big talk from someone who is living in gov’t housing I’m paying for,, eating food I’m paying for,, wearing clothes I bought for you...


45 posted on 02/24/2010 4:33:54 PM PST by Neidermeyer
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To: trumandogz

Yeah we’ve had this discussion before. It just bothers me when people take joy at other peoples misfortune.


46 posted on 02/24/2010 4:33:59 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: LearsFool

yep, teh bible also talks about wars and disasters. I don’t seem to remember much about Jesus taking glee at those peoples misfortune.


47 posted on 02/24/2010 4:35:11 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: Jacquerie

Many people think their problems will end with foreclosure. In FL, you still owe the amount on the promissory note.
**********************************************
NEGATIVE, FL is a non-recourse / judicial state .. I don’t know where you got that info that the bank gets the house and you still have to pay???

If you know of any nice beach property that is defendable against foreclosure (ie. in a CDO/CMO , recording/assignment issues etc. etc. ) and the mortgagee is both preparing to let it go by default in a foreclosure hearing and they are willing to give a quick claim to me for a nominal fee let me know!! I may not ever own the property but I’ll control it for years and years and rent it by the week/month to vacationers...


48 posted on 02/24/2010 4:41:56 PM PST by Neidermeyer
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To: driftdiver
I don’t seem to remember much about Jesus taking glee at those peoples misfortune.

I don't either. What's your point?
49 posted on 02/24/2010 4:43:31 PM PST by LearsFool ("Thou shouldst not have been old, till thou hadst been wise.")
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To: LearsFool

All these people in glass houses throwing stones at those who are suffering. very biblical


50 posted on 02/24/2010 4:45:07 PM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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