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November 10th, 2010

Zillow: Number of underwater borrowers growing

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Underwater home It’s not as though I expect the underwater crisis to go away anytime soon, but I have to admit that I’m still a little surprised when I hear the number of underwater borrowers is growing. Perhaps I’m most shocked that Washington still hasn’t designed a meaningful program to help these borrowers refinance to today’s low mortgage rates.

HSH.com has given the underwater-but-can’t-refinance issue a lot of thought, that’s why we devised our own plan: The Value Gap Refinance.

From the Wall Street Journal:

In the U.S., 23.2% of U.S. mortgage holders were underwater, owing more money than the house is worth. That’s up from 21.7% from a year ago, according to Q03 data out Wednesday from Zillow.com. Roughly 13.9 million homes now have negative equity. Many of these homes could end up in foreclosure should borrowers give up making payments on homes that aren’t worth what they owe—let alone building equity.

Some economists expect there’s more to come—into 2011. “One-quarter of homes [with mortgages] with negative equity is a huge number, but I don’t believe this will hit bottom until June or July,” says Cameron Findlay, chief economist at LendingTree.com. He projects that average homes prices could drop another 4% from now before they bottom out.

Thinking about walking away?

Walking away from your home loan shouldn’t be a decision that’s made overnight, and you should know that the process won’t be short and simple. Strategic defaults can come with a host of short- and long-term repercussions, including some of which you might not be aware of. I have compiled a list of both the pros and cons to walking away from your mortgage. It’s essential for you to be aware of both before you consider a strategic default as the solution to your problem.

Be sure to check out my article “The pros and cons of walking away from your mortgage.”

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One Response to “Zillow: Number of underwater borrowers growing”

  1. Tweets that mention Zillow: Number of underwater borrowers growing | HSH Financial News Blog -- Topsy.com Says: November 10th, 2010 at 7:12 pm

    [...] This post was mentioned on Twitter by HSH Associates and Cheryl Hubbard, Cheryl Hubbard. Cheryl Hubbard said: Zillow: Number of underwater borrowers growing: Many of these homes could end up in foreclosure should borrowers… http://bit.ly/b0BLpN [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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