Nearly 25% of U.S. mortgage holders are underwater. What would you do if you were forced to move?
I came across a disturbing report on Bloomberg this morning. According to new data published by First American CoreLogic, as of the fourth quarter of 2008 over 8.3 million U.S. mortgage holders were underwater aka owe more money than their homes are currently worth on the open market. If I recall correctly, someone said on the radio this morning that this is equivalent to around 20% of all mortgage holders, with another 5% who are within 5% of having negative equity.
This can't be good for home values. With the jobs market like it is, I am sure that many people are being forced to move to find decent employment. This leads to the question, what would you do if you were forced to move and you had negative equity in your home? Would you just walk away from your loan and let the bank foreclose on your house or would you pony up the extra dough to give your home away? I can't see many people paying money out of their own pockets to sell their house right now, if they even had the money to do so. This likely means that we will continue to see a huge number of foreclosures out there which will continue to drive down home values, regardless of what "plans" the government cooks up.
More Than 8.3 Million U.S. Mortgages Are Underwater