1 In 4 U.S. Mortgages Are Underwater

Feb 24^th, 2010

25% of all mortgage borrowers have been reported to be underwater or owing more than their homes are worth.

According to First American CoreLogic, a U.S. housing research company, 11.3 million borrowers or 24% of all homes with mortgages were already underwater by December 2009. This figure is a dramatic increase of 23% from 10.7 million borrowers from only 3 three months earlier.

The state of Nevada was crowned the worst with 70% of all mortgages underwater. The remaining severely underwater states were as follows Arizona (51%), Florida (48%), Michigan (39%) and California (35%).

For some borrowers who are not willing to sell and are able to pay their monthly bills, they can afford to ride out the storm. For the less fortunate, plunging home prices can translate into disaster. If they lose their job or experience a medical emergency, they will not have the luxury of tapping into the equity of their home for extra needed funds.

It also makes many strapped homeowners immobile and cannot relocate for a new job opportunity if they choose to downsize or sell their home.

Negative equity is the driving force for foreclosures and increasing immobility for millions of American homeowners. The growing fear is that as negative equity deteriorates, many homeowners will be left with no option but to stop making payments and walk away from their homes.

According to Mark Fleming of First American CoreLogic, although the nation is expecting a slight improvement in home prices for 2010, negative equity will continue to remain a dominant obstacle for U.S. homeowners in years to come.

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Deutche Bank Forecasts 48% U.S. Mortgages To Be Underwater By 2011

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News Archive

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