Underwater Mortgages

Article Index

Why Millions of Americans are Still "Trapped" in Their Homes

By , Associate Editor, Money Morning -

For millions of Americans who were underwater on their mortgages, the tide is finally receding.

That's good news for the housing market, of course, and for the U.S. economy as a whole, as housing is a major engine of the economy.

Housing not only generates construction jobs, one of the hottest job sectors in the country right now, it also sparks spending on home furnishings and appliances. And as home prices increase, people feel more wealthy and tend to spend more.

The number of homeowners underwater - those who owe more on their mortgage than their home is worth - dropped in the first quarter to 25.4% percent of all mortgages, or 13 million homeowners, from 31.4 % a year earlier, real estate researcher Zillow reports.

To continue reading, please click here...

Surge in Strategic Defaults Threatens Housing Market Recovery

By , Contributing Writer, Money Morning -

A growing number of homeowners who owe more on their mortgages than their property is worth are opting for "strategic default," which means walking away from their homes, even though they can afford to make their monthly payment.

If the trend accelerates, it could put more empty houses on a market that's already overburdened with vacancies and snuff out any recovery in the moribund housing market.

Right now, more than 10% of borrowers are 25% or more underwater on 4.9 million mortgages. The total valuation could saddle banks with as much as $656 billion of bad loans, according to the latest report from Corelogic.

Read More…

Obama Reveals $14 Billion Housing Program Aimed at Unemployed and Underwater Homeowners

By , Contributing Writer, Money Morning -

The Obama administration on Friday announced a $14 billion program to shore up the housing market by giving lenders incentives to slash some mortgage debt and reduce mortgage payments for the unemployed. As the housing market struggles under the weight of an epidemic of foreclosures there was disturbing evidence last week that the malaise is […]

Read More…

Mortgage Markets Show Increased Stability, But Limited Opportunity

By , Contributing Writer, Money Morning -

[Editor's Note: This analysis of the U.S. mortgage market is part of a two-story package that appears in today's issue of Money Morning. To read a related story on the outlook for adjustable-rate mortgages (ARMs), please click here.]

It doesn't have four letters, but "mortgage" has definitely been a dirty word in the financial world the past few years. That's especially true when the word "mortgage" is paired up with such other terms as "subprime," "delinquent," and "foreclosures."

Little wonder that mortgages - along with the derivative securities backed by them and the often-unseemly practices of the people pushing them - have gotten much of the blame for precipitating the economic meltdown from which the American economy is now struggling to recover.

There's still plenty of woe in the mortgage world. But in recent months there have also been some signs that the real-estate-financing markets are at least regaining some semblance of stability, with foundations being poured for a rebuilding phase that might not be too far down the road.

Read More…

Surge in Underwater Mortgages Forces Obama Administration to Review Loan Limits

By , Contributing Writer, Money Morning -

By Don MillerAssociate EditorMoney Morning Almost a quarter of U.S. homeowners now owe more on their mortgage than their homes are worth, according to one new study, signaling additional challenges to the Obama administration's efforts to stabilize the housing market.  About 21.8% of all owners were underwater as of March 31, according to a report […]

Read More…