The drop in home prices is fueling a vicious cycle of foreclosures as it eliminates homeowner equity and gives borrowers an incentive to walk away from their mortgages. The more severe the negative equity, the more likely are defaults, since many borrowers believe prices will not recover enough.
subprime loans, of which 69 percent will be underwater in 2011, up from 50 percent in March
adjustable-rate mortgages 89 percent will be underwater in 2011, up from 77 percent, the report said.
Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.
"For many, the home has morphed from piggy bank to albatross," the analysts said.
I don't want to get into an argument but home ownership is not for everyone. In fact, we should really tip toe the line of telling people to own a home is an actual good idea.
Which is mildly entertaining because Fannie Mae was one of the biggest and loudest voices for home ownership who preached anyone could own a home if they practices discretionary spending and financial responsibility.
On a planner's level-- no, I won't decry the idea of subrubanism here just yet-- but most suburban homes built today will have a resounding effect on future generations due to their high maintenance issues and their lack of quality construction.
Okay. Hope this comes out here when I paste it. You have to ask yourself WTF when you read that 26% of people are “underwater” and up to 50% will be by 2011 on their mortgage. Here is what is wrong with the numbers and what is wrong with not insisting on the 20% down rule.
This is specific to my home and area in the greater chicagoland/burbs. I own a certain model home in a nice community. I bought it in a certain year. See below chart. Doesn’t matter when because mine is located in the 20% down column. This is what they sold for in the year as indicated. They are about 20 year old homes.
To read this see the year 2009. To the right is what they are selling for today as to what they sold in previous years. Next to that is a column which shows no money down and what your homes percent increase/decrease would be. Next column is with 5% down payment, so on and so forth. The last column shows principle added into the column of 20% down.
So you have to wonder, when looking at something like this above, who is underwater. Negative percentages are in brackets (%). Clearly it would be anybody with less than 5% down who bought a home in the last 3 years. Everybody else is above water. I guess 26% of people bought homes in the last 3 years with 5% or less down on their homes. That or the idiots refinanced their homes and took equity out to fund a vacation to Disneyworld. It’s hard for me to feel sorry for people when I know the numbers.
My neighbor just sold her house for 600k. she dropped the price by 80k in the last 2 months, but it’s still almost 2x what she bought it for 10 years ago.
So these people you know who are ‘short selling’ – did they buy at the end of the bubble (i.e. did they decide buying artificially inflated real estate was an acceptable risk)? Can they not keep up payments? Do they not think there will be any rebound whatsoever?
On the fence, I appreciate all the math that you did but if you bought in Florida in say 2006 you are underwater. It doesn't matter what you put down. I agree that you should have to put 20% down. Unfortunately, the mortgage companies wanted to get rich quick and once the bundled them and split them all up no one cared if they good or not...
This was one of the pillar's of Margaret Thatcher's new England.
Reagan, Bush, Clinton and even I think it's a good idea but all of that cash created a bubble. The only person that had a shot at bursting it was Alan Greenspan.
Half of US Mortgages Seen Underwater
The drop in home prices is fueling a vicious cycle of foreclosures as it eliminates homeowner equity and gives borrowers an incentive to walk away from their mortgages. The more severe the negative equity, the more likely are defaults, since many borrowers believe prices will not recover enough.
subprime loans, of which 69 percent will be underwater in 2011, up from 50 percent in March
adjustable-rate mortgages 89 percent will be underwater in 2011, up from 77 percent, the report said.
Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.
"For many, the home has morphed from piggy bank to albatross," the analysts said.
-deutsche
Which is why we have to put back in place the 20% down rule.
I can't even imagine not having put 20% down on my house.
Who the @!?* doesn't put down 20%?
You don't have to answer that. It is clear who the "who" is. And no, we do not call them victims.
Ugh, this is definitely a Clinton issue.
I don't want to get into an argument but home ownership is not for everyone. In fact, we should really tip toe the line of telling people to own a home is an actual good idea.
Which is mildly entertaining because Fannie Mae was one of the biggest and loudest voices for home ownership who preached anyone could own a home if they practices discretionary spending and financial responsibility.
On a planner's level-- no, I won't decry the idea of subrubanism here just yet-- but most suburban homes built today will have a resounding effect on future generations due to their high maintenance issues and their lack of quality construction.
An 8 trillion dollar 30-year time bomb!
yeah, even more good news!!!
Okay. Hope this comes out here when I paste it. You have to ask yourself WTF when you read that 26% of people are “underwater” and up to 50% will be by 2011 on their mortgage. Here is what is wrong with the numbers and what is wrong with not insisting on the 20% down rule.
This is specific to my home and area in the greater chicagoland/burbs. I own a certain model home in a nice community. I bought it in a certain year. See below chart. Doesn’t matter when because mine is located in the 20% down column. This is what they sold for in the year as indicated. They are about 20 year old homes.
To read this see the year 2009. To the right is what they are selling for today as to what they sold in previous years. Next to that is a column which shows no money down and what your homes percent increase/decrease would be. Next column is with 5% down payment, so on and so forth. The last column shows principle added into the column of 20% down.
Year - Price - %up/down - w/5% down - w/10% - w/20% - w/20%+principle
2009 - $355,000 - 0% - 5% - 10% - 20% - 21%
2008 - $370,000 - (4.5%) - .5% - 6.2% - 17% - 18%
2007 - $385,000 - (8.0%) - (3%) - 2% - 13% - 16%
2006 - $370,000 - (4.5%) - .5% - 6.2% - 17% - 21%
2005 - $355,000 - 0% - 5% - 10% - 20% - 25%
2004 - $345,000 - 3% - 8% - 12% - 22% - 30%
2003 - $335,000 - 6% - 11% - 15% - 25% - 33%
2002 - $325,000 - 8% - 13% - 18% - 27% - 37%
So you have to wonder, when looking at something like this above, who is underwater. Negative percentages are in brackets (%). Clearly it would be anybody with less than 5% down who bought a home in the last 3 years. Everybody else is above water. I guess 26% of people bought homes in the last 3 years with 5% or less down on their homes. That or the idiots refinanced their homes and took equity out to fund a vacation to Disneyworld. It’s hard for me to feel sorry for people when I know the numbers.
even the people in the positive percent could not get the value for their home now
i know allot of people short selling
My neighbor just sold her house for 600k. she dropped the price by 80k in the last 2 months, but it’s still almost 2x what she bought it for 10 years ago.
So these people you know who are ‘short selling’ – did they buy at the end of the bubble (i.e. did they decide buying artificially inflated real estate was an acceptable risk)? Can they not keep up payments? Do they not think there will be any rebound whatsoever?
On the fence, I appreciate all the math that you did but if you bought in Florida in say 2006 you are underwater. It doesn't matter what you put down. I agree that you should have to put 20% down. Unfortunately, the mortgage companies wanted to get rich quick and once the bundled them and split them all up no one cared if they good or not...
"Ugh, this is definitely a Clinton issue."
This was one of the pillar's of Margaret Thatcher's new England.
Reagan, Bush, Clinton and even I think it's a good idea but all of that cash created a bubble. The only person that had a shot at bursting it was Alan Greenspan.
Think what's a good idea?
wow, really? quick, call Jacques Cousteau....oh wait, he's dead.
Block this user
Are you sure you want to block this user and hide all related comments throughout the site?
Archinect
This is your first comment on Archinect. Your comment will be visible once approved.