The Negative Equity Crisis and Second Mortgages with Ilyce Glink on the Clark Howard Show June 7, 2011:
Folks, we’ve got ourselves a full-blown negative equity crisis. Recently released data from CoreLogic reports that 38 percent of American homeowners who have borrowed against their homes are underwater with their mortgages. This is staggering.
Perhaps even more amazing is that these same homeowners took out $2.69 trillion in equity at the height of the housing boom between 2004 and 2006. Needless to say, that’s a huge amount of money – most of which is never coming back. The return of home values to 2002 levels, in some cases, earlier than that, means that much of this equity has simply disappeared.
There seems to be a direct correlation between these ugly numbers and the amount of people who were told their homes were worth more, as well as the formerly easy lending practices of last decade.
The level of the negative equity crisis is profound. For homeowners who opted for a second mortgage, the average underwater amount is $83,000. Compare this number with the $50,000 median experienced by those without second mortgages.
Are you underwater in your home? If so, you’re not alone.
Get more information and links on Ilyce’s blog.
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