Monday, Aug 09, 2010
More than 20% of the nation's mortgage borrowers owe more than their homes are worth
Cnn: 20% of mortgages are underwater
This so-called negative equity is a hotly watched statistic because it is a prime predictor of foreclosure -- second only to loss of income.
Posted by mark @ 10:17 AM (1254 views) Add Comment
10 Comments
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1. mander said...
Time to sell the dollars more devaluation is comming.
2. mark wadsworth said...
Glorious. That's the inevitable outcome of Home-Owner-Ism.
3. happy mondays said...
This is America, we seem not to be taking the same path on the housing front! Unless some one can explain why this would effect us, as we have not had the house price deflation (yet, hopefully)
4. mark said...
the old saying goes, USA sneezes everyone else catches ebola
5. techieman said...
"Time to sell the dollars more devaluation is comming." is it?
6. str 2007 said...
This effects America more than us as they can walk away from negative equity leaving the bank to pick up the pieces.
In the UK unless you're declared bankrupt the negative equity still needs to be paid off.
So this article is really relevant to our HPC directly.
7. techieman said...
STR 2007 - thats partially correct as it depends on the state.
"These are all the mortgage walkaway trustee sale states, meaning they are non-judicial foreclosure states.
In those states, generally, when they foreclose on you, they cannot pursue you for their financial losses.
Many, such as California, do in theory allow a lender to choose judicial foreclosure but in those cases the lenders only do so if a borrower has significant other assets. This is the "one action" rule that lets the lender either pursue non-judicial foreclosure, at lower cost and less time, or judicial foreclosure that costs more money and takes more time but lets them go after you for their financial losses.
Alaska
Arizona
Arkansas
California
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (as long as non-judicial foreclosure is used)
Nevada - note that the lender CAN get a deficiency judgment (See below)
New Hampshire
Oregon
Tennessee
Texas (but even in a non-judicial foreclosure, the lender can pursue a deficiency judgment)
Virginia
Washington
West Virginia
These are states that also allow non-judicial foreclosure, and/or where non-judicial foreclosure is more common and deficiency judgments can be obtained more easily:
Michigan
Minnesota
North Carolina
Rhode Island
South Dakota
Utah
Wyoming "
Dont know what the percentahge of the population or the percentage of nequity properties are in those states - but i think UT did a calculation based on all of them whether non recourse or recourse.
ReCap: Signal one
8. mander said...
techieman,
I expect more bad news to come from America and so more preasure on the dollar.
9. techieman said...
mander expect the unexpected ;-)..
Clue: in 2008 you couldnt get much worse news and yet the dollar appreciated..... how did that happen?
10. clockslinger said...
Of no relevance to UK at all. But I'd like some stats on the percentage of borrowers in nequity, and the amount of the average nequity, here if only to cheer me up a bit.