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Foreclosure Crisis Update: Underwater Homeowners Reach 7.5 Million!
By admin | November 11, 2008
Reports show that the number of underwater homeowners is now 7.5 million and is alarmingly growing because owing more than the actual worth of the house is typically the first step to foreclosure.
Aside from this figure, about 2.1 million are also over the edge — that is basically fueling trouble if the time comes that financial crisis hit.
Negative equity, the technical term for this trend, leaves homeowners at risk to foreclosure. Reason behind is the borrower has a nil home equity to use when financial crisis hits. They cannot turn to refinancing or home equity loan to recover their mortgage payments.
On the other hand, there are also cases of underwater homeowners who manage to pay
their bills. These are those who have high income to pay their monthly dues.
Nevada, among other states, has the highest number of underwater borrowers. 48 percent of homeowners in the state have a negative equity. This percentage is almost 50 percent higher than Arizona that has 29.2 percent. Other states are Florida at 29.2 percent and California at 27.4 percent.
Bubble markets, as what these states are called, have fallen home prices as a result of economic crisis and rampant job losses. The situation is very crucial that even if you put a down payment of as much as 20 percent, it still isn’t a good chance. This trend can also be found in the area commonly known as rust belt regions where Michigan has the highest number of negative equity homeowners at 39 percent. Second to it is Ohio at 22 percent.
More so, another issue that makes the situation more crucial is the great influx of immigration. A lot of people that just came in these states owe more in their mortgages than the actual worth of their home. They was not able to build more equity of which they can turn in to when crisis strike.
Meanwhile, states that have the least number of underwater homeowners are New York at 4.4 percent, Hawaii at 5.6 percent, Pennsylvania at 5.7 percent and Montana at 6.9 percent.
Related Posts:
- Reading Into Home Equity
- Home Foreclosures Can Be Avoided…How?
- Short Sales and Foreclosed Homes Attack the Market
- Foreclosure Dip – Only a Preempt To a Bigger Downfall
- Can You Avoid Foreclosures?
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