Many Americans Owe More Than Homes Are Worth
More than 10 percent of American homeowners owe more on their mortgage than the value of their home, according to a new study by Moody’s Economy.com and reported on in a blog post by Boston Globe reporter Binyamin Appelbaum on February 22, 2008.
Binyamin refers to this as borrowers being "underwater." I also have heard the phrase "upside down on your mortgage."
"The borrowers can’t refinance because no new lender will write a loan for more than the home is worth. The industry has charged that some are simply refusing to make payments, and either abandoning their homes or waiting for lenders to kick them out. So far, the evidence is anecdotal, but the very idea terrifies the industry."
Comments