20% of all mortgages still underwater.
But that appears to be good news as that number is an improvement over from the past quarter. However, that is not the full story…..
“But don’t cheer about the slight gains in the past three months. Most of the improvement comes because so many people lost their homes to foreclosure “
The twin pillars of destruction in the real estate market still remain: high unemployment and negative equity. As long as the homeowners do not see the light at the end of the tunnel, they will be more inclined to walk away from their homes.
http://money.cnn.com/2010/08/09/real_estate/fewer_underwater_borrowers/index.htm
When will positive equity return? Experts say……
This is the question that is put forth to me frequently. Unfortunately, I don’t have a crystal ball, nor the mathematical mind-set to be able to compute the data available to reach a reasonable conclusion. Fortunately, there are those who do have the mathematical wherewithal to be able to draw such conclusions and they are of the opinion that positive equity will return for most somewhere between 2015 or 2016.
Remember, this is just opinion from one organization, so they could be completely off; but it does give us some statistical analysis based data to ponder.
Bank of America announces Principal Forgiveness for some Countrywide loans
Hip Hip Hooray!
Bank of America today announced its decision to agree to permit principal forgiveness for certain Countrywide loans which are severely underwater. This decision will affect some 45,000 borrowers who have “sub-prime and pay-option” loans.
This is fantastic news for those who are affected, as negative equity or being under-water, is one of the biggest reasons why some borrowers face foreclosure. Of course, the fact that some of these borrowers are voluntarily choosing foreclosure and walking away probably has something to do with BofA’s announcement today as well.
Countrywide issued a lot of sub-prime and option ARM products to consumers in California, could it be that they are acknowledging they were questionable products?
Whatever the reason, this is good news for all distressed property owners as this may be the first step and other lenders may follow Bank of America’s steps.
