Underwater Mortgages
by Tyler on 11/23/09
According to a report by First American CoreLogic, more than 23% of people with mortgages owe more on their property than what they’re worth. Another 2.3 million homeowners are within 5% of being underwater. What does this mean? It means that those homeowners will have to stay in their homes for a long time until the market bounces back. Even then the amount these borrowers owe will not cancel out the home’s value. It may sound like a lot of people are underwater, but the majority of these homeowners purchased within the past 5 years.
Underwater mortgages by states:
- Nevada: 65% of homeowners are underwater
- Arizona: 48%
- Florida: 45%
- Michigan: 37%
- California: 35 %
Those of you that are thinking about throwing in the towel should explore your options. Talk to a Realtor® about entertaining a short sale. If you have no other choice but to foreclose on your home, it may not be as bad as you think. Credit agencies realize that foreclosures from 2004-2010 should be weighed differently than foreclosures from 1984-1990. This kind of real estate market comes around once in a lifetime. Although it is a big hit to your credit when you go to rent and buy a car, analysts are predicting it will not ruin you forever.
