Skip to comments.11.3 million homeowners underwater on mortgage
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 ...
“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.
These people wouldn’t be complaining if their homes would be worth MORE than they owe.
Yes the banks weren’t complaining either when they were artificially inflating property values.
“These people wouldnt 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
Good point. Mine is paid off but worth less now than two years ago. I doubt that will make the news.
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.
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.
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.
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.
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.
neither would banks.
Their execs would be buying the homes fro their own use.
Which would only be a problem if they had a reason to sell soon... otherwise, it makes ZERO difference.
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.
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.
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.
Sorry about your friends.
Property taxes are still going up as house values are going down.
Worse next year.
There are plenty of those underwater who did put down 20%. Unfortunately, the market went down 50%.
Screw them, they made a bad investment and have no one to blame but themselves.
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 .
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!
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%.
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.
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.
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.
Bought at the top of the market, it turned out, with minimal down payment. Seemed like a good idea at the time.
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.
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.
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??
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.
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.
You buy , I’ll watch and laugh ... this isn’t over ,, not by a long shot.
“Well,one things 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.
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!
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.
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.
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.
Why not just make the form a three liner?
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...
Yeah we’ve had this discussion before. It just bothers me when people take joy at other peoples misfortune.
yep, teh bible also talks about wars and disasters. I don’t seem to remember much about Jesus taking glee at those peoples misfortune.
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...
All these people in glass houses throwing stones at those who are suffering. very biblical