In some counties in the US (Nevada, Florida, California, Arizona) the rates of negative home equity are over 50%. Around Las Vegas, the number is just over 70% though it's still stunning to see that number at 27% nationally. When people talk about a housing recovery, they would be wise to stop and start talking about that market stabilizing first. Every quarter there's some piece of news that jumps out and triggers new 'recovery' talk but it still keeps dropping. Recovery (nationally) will take years. CNBC:The number of borrowers who owe more on their mortgages than their homes are worth took a huge leap in the fourth quarter of 2010. A full 27 percent of borrowers are now “underwater” on their mortgages, up from 23 percent in the previous quarter, according to a new report from Zillow. Foreclosure moratoriums and falling home prices are to blame.
Adding to a slew of negative reports on home prices, Zillow found home values posted their largest quarter-over-quarter decline, 2.6 percent, since the beginning of 2009. The home buyer tax credit, which inflated home prices artificially in the first half of the year, resulted in a Fall hangover. Home prices plunged 5.9 percent compared to the fourth quarter of 2009.
With foreclosure moratoriums in place due to charges of faulty paperwork at some of the nation’s largest mortgage servicers, many homes with underwater mortgages that should have been repossessed by lenders were not, and instead boosted volume in the negative equity pool. Falling prices didn’t help.Why is it that the middle class are still stuck with this situation yet the bankers who created this are having record high bonus seasons?
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