Categorized | Finance and Mortgage

Number of Underwater Homeowners Jumps to Nearly Thirty Percent

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The number of homeowners that are currently underwater, or owe more than their home is actually worth, increased again in the third quarter. Roughly thirty percent of homeowners now owe more on their mortgage than the true value of their home. As such, refinancing options continue to grow more limited for homeowners, despite record-low mortgage loan interest rates.

Analysts attribute the gain to the overall decline in foreclosures. Many banks have slowed down the foreclosure process for many delinquent homeowners due to investigations into technicalities regarding the handling of documents. It is believed that the number of underwater homeowners may decline in 2012. Unfortunately, the number will not decline due to any anticipated increases in home values, but rather because foreclosures are expected to rise significantly.

Home values across the United States continue to drop, with only a few select cities posting any sort of increase. In general, those households that have underwater mortgages are far more likely to foreclose on their property, particularly if something out of the ordinary occurs. Mortgage payments are usually one of the first things to go for those holding an underwater mortgage while dealing with a pending job loss.

The news is not good for the United States housing market. Analysts are not entirely hopeful that the following year will bring any significant changes, despite actions being taken by the government. There is no clear indication as to when the housing market will improve in the United States, as prices continue to freefall, putting more families in a position of holding an underwater mortgage.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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