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Number crunchers at First American CoreLogic found that 27% of California homeowners with a mortgage, as of September, had no equity in their home.
FACG found these “upside-down” owners had a bigger loan balance than what the home is currently worth. Thin downpayments to start plus crushing home price losses are to blame.
This is a critical trend because studies show that owners with no equity in their frequently walk away from a house and let the bank foreclosure when household finances get pinched. And record foreclosures are already a drag on the market.
Other tidbits:
- 18% of all properties with a mortgage nationwide were in a negative equity position.
- Nevada led nation with 48% negative equity; Michigan was second with 39% before Florida (29%), Arizona (29%) bested California’s 27%.
- Top 6 states in negative equity account hold 58% of all of these worrisome mortgages. Excluding this half dozen, average negative equity in the remaining 44 states is 12%.
Other mortgage news…
- First American swings to loss, cuts jobs
- Massive mortgage aid planned
- Wells Fargo gets $25 billion from U.S. Treasury
- More homeowners get help to avoid foreclosure
- Google gets mortgage lecture
- O.C. foreclosures to drop in ‘09
Other real estate news …
anti-spam, please don’t block my messages anymore!
“Thin downpayments to start plus crushing home price losses are to blame”
No, that’s not true. People overpaying on homes are to blame. They paid 800k for a 300k house. That’s the problem.
It has to be higher than this- - I find it hard to believe that, minus the 6 top “performers,” the rest only average 12 percent…and FALP’s data has many quirks (it doesn’t represent the entire universe of mortgages, etc.). I look around my nice Newport neighborhood and I know for a FACT that a number of them are at or near the breaking point from equity to non-equity…and in the months ahead it will only get worse…
HEY MULLIGANHEAD
HERES SOME MORE GOOD NEWS FOR YOU
1 OUT OF 4
THATS NOT GOOD…..LOLL
I LOVE RENTING IN NEWPORT BEACH
Yo Yo Newport Guys and Gals,
On the surface all is well but I detctect a disturbance in the force.
The stay at home Mama Nazis in HarborVeiw seem to be cutting back.
Botox, Shopping, Lunching ….
I expect by the middle of next year we will have many stories of upper
middle class famlies walking away from their homes. Hot Milfs looking for new and better pay check free ride.
A riddle.
What is the difference between a stay at home HarborView mom and a Newport Beach Gold Digger?
Answer
They are the same animal. The gold digger has yet to harpoon her suger daddy.
It hasn’t effected me as I just refinanced my home, but if it has effected you, then you can thank the democratic congress, Nancy Palosi, Harry Reid, and Barney Frank for telling Fannie and Freddie to help out and give loans to people who couldn’t afford them, even illegal immigrants. It’s so nice to know that we can all be bailed out now. Unbelievable how the democrats have screwed all us.
Harbor view sounds jealous. No cutting back here or anyone I know.
Hmm…so that 2009 bounce back I hear so much about…I wonder how this will help out?
30-Year Fixed 9.875% 10.061%
15-Year Fixed 9.250% 9.520%
10-Year ARM 9.625% 8.601%
5-Year ARM 7.875% 6.610%
Wells Fargo.
Now this is for Jumbo Loans – Amounts that exceed conforming limit. I wonder where houses are that are like that…hmmm….10% on an over valued house sign me UP!
heres a vid for all the new comers to the blog. welcome.
the famous “Dude! Wheres my equity !” video:
http://www.youtube.com/watch?v=10WoQZKZkNs
I CAN’T BELIVE PEOPLE PAID SO MUCH FOR HOMES IN ORANGE COUNTY ESPECIALLY IN THE LAST FIVE YEARS. WOULD YOU PAY TWENTY THOUSAND FOR A CAR WORTH TEN THOUSAND. THNIK ABOUT IT. HOUSE FLIPPERS DIDN’T HELP THE EITHER, RIGHT?
If you look at the statistics, most of the foreclosures are happening in state’s with huge Hispanic populations.. AZ, NV, CA, FL. Majority of them all qualified with no documentation loans, Gardener/Maid. $120K year.. YEAH RIGHT!
fcprop, don’t blame it on the Hispanics. They just smelled a good thing and took advantage of it. There were plenty of people of all ethnicities milking the system. The majority of the blame has to go to the banks, mortgage lenders and investment firms who loosened their lending regulations, sold easy mortgages, bundled them into nice neat investment vehicles and sold them to greedy investors looking to invest in high yield bonds.
If the banks and mortgage lenders were too lazy or indifferent to check the info on the application then they are 100 percent culpable. They didn’t do their due diligence and got burned and now they because they can afford to lobby congress, Bernanke and Paulson we the tax payers have to pay to bail them out. It’s a national disgrace and a first rate con job.
This really makes it hit home that doing loan mods for all these people will never happen, it’ll just tick paying people off and make them think twice about paying their underwater mortgage…
All those who had their homes “stolen” from them, take heart!!!
You might be able to get it back if you still want it, really cheap!!!
GOOD GOD!!!!!
Now Hispanics are to blame!!!
FIrst it was stupid people in general, then the Goooberment, then Republicans and Democrats, then Just the Democrats, now the Hispanics and the Democrats!!!
YOU silly people need to realize it was greed!!! For example, people like to refer to the law that outlawed “redlining” under Jimmy Cater.
That law only applied to banks yet banks only originated 5% of all the mortgages, the rest were originated by lenders not subject to that 1976 law.
It was GREEED and too little regulation, NOT HISPANICS, NOT STUPID BORROWERS.
If you are a goat herder in Zimbabwe and someone offers you a 3000 sq foot house with cash back once you sign on the dotted line, are you stupid for signing or smart?
Up to, “a goat herder in Zimbabwe” I was with you and cheering for you.
In the early 1980’s a 30 year fixed rate with 20% down averaged 12%. People saved and bought homes. The home builders and bankers lobbied hard and got their way starting around 1994. A house is a depreciating asset, it gets back to the three rules of real estate, location,location,location. Allow market forces to work and there will be no housing problem. Easy credit plays on human nature, most people are optimistic and this is how bubbles get started. Live within your means and life is good.
I can not believe people still use the word lost.Lost means no were to be found.Want to know were it is.Go to any lender and ask for a loan.What was lost is now clearly found.They aquire more of your home as we recieve less.Foreclosures should me stopped and banned.Give them more bailout funds,just don,t let them take your property.It’s only fair.They cried about money while we ask for a fair business deal.It’s time the weak tell the p@&^# to man up.