1 in 4 Mortgage Borrowers Is Under Water
(CBS/AP)
Data from First American CoreLogic, a Santa Ana, Calif.-based real-estate information company, shows that in the third quarter of 2009 almost 10.7 million households had negative equity in their homes.
Despite good news on the house resales front — it was reported Monday that , climbing to the highest level in 2? years, due in part to a first-time buyers' tax credit — the Journal's Ruth Simon and James R. Hagerty write that this swelling of "underwater mortgages" threatens the prospects of a sustained housing recovery.
These properties are more likely to fall into foreclosure, ultimately being dumped by banks and mortgage holders onto an already-saturated market, depressing falling house prices even further.
The First American report said that more than 520,000 of borrowers whose mortgages are at least 20% higher than their home's value have received a default notice.
Negative equity "is an outstanding risk hanging over the mortgage market," Mark Fleming, chief economist of First American Core Logic, told the Journal. "It lowers homeowners' mobility because they can't sell, even if they want to move to get a new job."
According to the analysis, homeowners in Nevada, Arizona, Florida and California are more likely to be deeply underwater. In Nevada, for example, nearly 30% of borrowers owe 50% or more on their mortgage than their home is worth, said First American.
For more read the complete article at wsj.com, and check out the Journal's Interactive Map: State-by-State Data on "Underwater Borrowers."
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The banks made a business decision to give these people the loans and lost. They should be allowed to go under for making bad business decisions.
Th government did not hold a gun to the heads of those writing mortgages. It was a bad business decision on their part and our governmnt bailed them out.
As far as non-loan worthy people go, the government sold them out as well. The concept of free trade agreements was only a fabrication made by the highrollers who would benefit by busting the unions and shipping the high paying manufacturing jobs off shore to line their pockets with more money.
This is no different than buying a car. When you buy a car it drops in value immediately when you drive off the lot. If you can't make payments it gets repossesed. Because it drops in value, there are times that the car is worth less than what you own on it. This is nothing new.
The banks really made out like bandits, they got the bail, they acquired a huge wealth of properties which were conveniently called "Toxic assets". Those acuisitions they're setting on are potential gold mines when the economy eventually bounces back. They got the cake and to eat it too. Not many talk about that - many bailed out loans could have been forgiven - the extra money on hand could have boosted the economy on homes with the burden removed.
I think whole thing was a jump before they think about it reaction.
18 more republicans senate seats on the ballot in 2010. Let's put them on the unemployment line along with some republicrats.
18 more republican senate seats on the ballot in 2010. Lets send them all packing including the republicrats.