Here are some not-so-fun facts on borrowers who owe more on their mortgages than their houses are worth.
- About 10.7 million homes in the United States were underwater in the last three months, compared to 10.9 million in the last quarter, shows a report by CoreLogic.
- About 22.1 percent of all residential properties with a mortgage are worth less than the amount owed on the loan.
It gets much worse for some states:
- In Nevada, more than half of homes with a mortgage are underwater.
- In Arizona and Florida, nearly 1 in 2 borrowers owe more on their loan than the value of their homes.
But the report brings some good news to California. The state is no longer among the top 5 states in CoreLogic’s negative equity report. California had been in the top list since 2009, but it was replaced by Georgia, where 30 percent of borrowers are underwater on their mortgages. Michigan ranks fourth on the list, with 35 percent.
On average, borrowers with conventional loans are underwater by about $70,000, compared to about $26,000 for those with Federal Housing Administration mortgages.
Most of these underwater borrowers have interest rates that are more than 5 percent and have difficulty refinancing because they lack the equity. Let’s hope the revised version of HARP, the Home Affordable Refinance Program, will help them refinance.
Negative equity isn’t just a problem for those who are upside-down on their mortgages, says Mark Fleming, chief economist with CoreLogic.
“The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy,” he says.
For more information on refinancing call American Financial Network at 1-877-669-0777 or visit us at http://www.mtgloansdirect.com.
