1/3 of US mortgaged homes have underwater mortgages
According to Bloomberg:
“A growing number of U.S. homeowners owe more than their properties are worth after prices extended their two-year decline in the first quarter, Zillow.com said…
The gain in underwater homeowners will lead to more bank repossessions, the company said.”
Barry Rithholtz notes:
The recession cut home values by $2.4 trillion last year. In a separate survey of homeowner sentiment, 31 percent of homeowners said they would be at least “somewhat likely” to put their property up for sale in the next 12 months should they see signs of a recovery.
This implies that any housing “recovery” will be about stabilization and stopping sales/price erosion — not about regaining higher prices anytime soon . . .
[...] plan of loan modifications? FAILURE. 1/3 of American homeowners have underwater mortgages. With loan modifications, the bank agrees to make your 30 year mortgage into a 40 year [...]