One In Three Chance You'll Soon Owe More Than Your House Is Worth

[FourScore]

One In Three Chance You'll Soon Owe More Than Your House Is Worth
Posted Aug 20, 2009 11:15am EDT by Henry Blodget

Foreclosure rates in the U.S. remain near record highs. More than 13% of American homeowners with a mortgage are either behind on their payments or in foreclosure. The latest report from the Mortgage Bankers Association, released today, shows the percentage of loans that entered the foreclosure process dipped slightly to 1.36%, down from an all-time high of 1.37% in the first quarter.

However, that number may soon rise again as mortgage delinquency rates continued to climb in the second quarter.

That news is no surprise to Karen Weaver of Deutsche Bank. She startled everyone a few weeks ago when she predicted that, by 2011, nearly half of American mortgage holders would be underwater (meaning that they'll owe more on their mortgages than their houses were worth).

Half of mortgage holders means about one-third of American households. Put another way, Weaver forecasts 25 million mortgage holders will be under water by 2011, up from an estimated 14 million currently.

Aside from the mega-bummer of owing the bank more than your house is worth, underwater mortgages exacerbate another problem: foreclosures. In previous housing busts, being underwater led to a greater likelihood of default, and Weaver believes this the foreclosure problem will be much worse this time around.

In a recent report, Weaver analyzed all the various kinds of mortgages in the US and estimated that 48% of them would be underwater by 2011. This includes "prime" borrowers, of whom a startling 41% will be underwater.

http://finance.yahoo.com/tech-ticker/article/307793/One-In-Three-Chance-You%27ll-Soon-Owe-More-Than-Your-House-Is-Worth?tickers=xhb,tol,len,kbh,dhi,phm

[MercutioATC]

1. No. One in three mortgages in the US may soon be underwater.

There's a distinct difference.

I'm not addressing you, the original headline is grossly sensational.

[stray cat]

2. No fear - I could never afford to buy one.

[hedgehog]

3. The housing bubble raised the prices of houses in places people

flocked to to find work. How do we gt the prices of homes back to what people can afford without punishing the innocent or rewarding the greedy?

[gleaner]

4. Been there....

doing it now. Add our horrendous medical bills which we are completely without the means to pay and you have my life and my husband's life. How many others here are overdrawn at the bank for at least part of the month because they have to pay the mortgage, buy medicine and food, and pay utility bills?

We should get together and have an overdraft notice vigil where we light 'em up and hold them high in the air instead of candles. That is the new America. No hope, no help and all the abuse we can handle.:crazy: