Almost One Third of U.S. Mortgages Are Under H2O –30% in Dallas Fort Worth
That’s 15.2 million U.S. mortgages, or 32.2 percent of all mortgaged properties in the U.S., were in a negative equity position as of June 30, 2009. (And you ask why I’m saying we have not hit bottom yet?) Steve Brown reports that about 30% of Dallas/Fort Worth mortgages are gurgling - -that is, the homeowners owe more than what the property may not be worth. This could be because the owners bought high — say they paid a million and still owe that but the property is now worth $800,000. Or they took out those second mortgages which, THANK GOD, can only be taken out on 80% of the home’s value. Either way, all this means is that if you have to sell your home today, you’d take a loss. Just keep paying the mortgage, hang onto your job, and tell your children and grandchildren: it’s probably not a good idea to think of your home as an ATM.
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Not surprising when two years ago all you needed was a pulse and two forms of i.d. to get a mortgage.
Not just that you’d take a loss in the sense that you’d sell it for less than you paid for it, but ALSO in many cases that you would have to pay cash to the lender to cover the difference between your mortgage debt and the sale price. For example let’s say that in 2006 you bought a $1M home and have a mortgage balance of $800k. If you sell that baby today for $700k, you still owe $100k to your lender to clear the mortgage debt! To generalize, most people that “have to sell” in this market are not in cash flush positions… Keep in mind too that at lower conforming loan price points, the new government programs change the options available to the financially distressed homeowner and do provide some relief on such short sales in many instances.