| WSB News |
6 States = 60% of Underwater Mortgages
UNDATED (AP) Here's a shocker: almost half of Nevada homeowners with a mortgage owe more to the bank than their homes are worth.
Here's another: If you add in the homeowners like them in California, Arizona, Florida, Georgia and Michigan, together they account for nearly 60 percent of all homeowners who are ``underwater'' on their mortgages.
Nationwide, almost one out of every five homeowners with a mortgage owes more to their lender than their properties are worth. According to a report released Friday by First American CoreLogic, if you subtract those states, the rate drops to about one in 10.
The new data underscore the staggering scope of the U.S. housing recession, but also the challenges that government officials face in designing a massive new program to help homeowners avoid foreclosure, with layoffs soaring and the economy sinking.
Nationally, home prices are already down about 20 percent from their peak in mid-2006. Nouriel Roubini, economics professor at New York University, says by the time the housing market hits bottom, prices may be down 40 percent from the top, leaving 40 percent of homeowners underwater.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
Here's another: If you add in the homeowners like them in California, Arizona, Florida, Georgia and Michigan, together they account for nearly 60 percent of all homeowners who are ``underwater'' on their mortgages.
Nationwide, almost one out of every five homeowners with a mortgage owes more to their lender than their properties are worth. According to a report released Friday by First American CoreLogic, if you subtract those states, the rate drops to about one in 10.
The new data underscore the staggering scope of the U.S. housing recession, but also the challenges that government officials face in designing a massive new program to help homeowners avoid foreclosure, with layoffs soaring and the economy sinking.
Nationally, home prices are already down about 20 percent from their peak in mid-2006. Nouriel Roubini, economics professor at New York University, says by the time the housing market hits bottom, prices may be down 40 percent from the top, leaving 40 percent of homeowners underwater.
(Copyright 2008 by The Associated Press. All Rights Reserved.)
What others are saying
- Upside Down in MichiganI have a mortgage on a home that is worth less than the loan on it. Heres why, 0% down, buying at the wrong time (about 4 years ago) nice reasonable starter home outside a college town. Completely within my budget. Economy turns farther south, big 3 drop tons of workers, all the supporting business drop them as well. Michigan has lost some 300,000 jobs in the last 8 years. Housing market tanks. I am now the owner of a very nice rental property after I moved for a better job and couldn't sell the house after eight months on the market. Upside down doesnt mean deliquent though, I've never been late on a payment even though I am paying on two homes at once. The biggest issue is stupid people buying more home than they could afford and not bothering to run the numbers
- Why?Wonder why these particular states have such high rates? There are two reasons. Nevada, Arizona, California, and Florida have high rates because property values soared so high (along with mortgages) that the loans are upside down now that property values have dropped.
Sadly, Georgia and Michigan have many upside down loans for a completely different reason. It's because both states were hotbeds of sales of homes to minority buyers. There's nothing wrong with mnority home ownership;it's a good thing. However, with ownership, there must be a level of personal responsibility and the ability to repay the loan. That has certainly not been the case.
Look at a map of foreclosures by zip code for Atlanta. The vast majority of the foreclosures are south of I-20. Coincidence? I don't think so. Thank the well-intentioned Democrats in Congress for that. They are the ones who forced lenders to make loans to minorities that were shaky even when property values were high.
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