Bleak news on the state of mortgage holders this morning from CNN:
NEW YORK (CNNMoney.com) — In a sign that more foreclosures could be on the horizon, 23% of people with mortgages owe more than their home is worth, according to a report released Tuesday.
Almost 10.7 million U.S. mortgages were “underwater” as of September, said research firm First American CoreLogic.
Another 2.3 million homeowners are within 5% of negative territory, the report said. The two figures combined comprise almost 28% of all residential properties with mortgages.
Negative equity, also called an “underwater” or “upside down” mortgage, has become more common as home values plummet. The report is closely watched because borrowers who are underwater are more likely to be foreclosed.
Foreclosures have been rampant for some time, but lately the tide of decay had seemed to be slowing — so Tuesday’s report could dent optimism for the housing market over the next few months.
There has been a lot of mixed and confusing news on the state of real estate. Some suggest that markets are recovering. Others suggest it is worse than ever before – and that it may even take 10 years for home prices to recover! As Short Sale investors or real estate agents who handle short sales; many of you take a keen interest to the state of the real estate and mortgage industries, and it’s important to stay up on the news.
Regardless, the numbers are what the numbers are, and 1 in 4 mortgages being underwater is an enormous issue, but it also presents enormous opportunity. With jobless rates at an all-time high; lenders will feel pressure when families who are underwater on their mortgages and become jobless no longer have the ability to pay those mortgages. Short sales are a solution to this problem – and many recent news articles continue to point to loan modification and short sales as becoming increasingly prevalent throughout 2010 and even beyond.
What do you think of this news? What does it mean for the future?
