Breaking News, World News and Taiwan News.

'Underwater mortgages' plague homeowners

SEBRING--Elliott Moses has lived in Lake Placid since 2001. He has a small business and needed a place of his own.

In 2005 he bought a home, expecting to live in it until he “dropped dead.”

He said he put down US$40,000 for the US$149,000 house, but the timing of his purchase conspired against him like many others in his situation.

When Moses closed on the deal, it was the height of the real-estate boom. The real-estate bubble burst a couple of years later, and Moses' home value plummeted.

He still owes US$94,645.43 on his mortgage, he said, but estimates his home is worth US$40,000.

He said he tried to renegotiate his loan and bring down his US$750 monthly mortgage payment, but hit a brick wall. That's when he stopped making payments, figuring his lender would be forced to talk to him.

Moses' situation is familiar to many others who either bought a house during the boom time, refinanced their homes for a larger mortgage or got an equity line of credit when their home values ballooned.

“Of course, the market tanked, they lost their jobs and couldn't service their loans,” said Steve Fruit, broker associate with REMAX Realty Plus II.

The most immediate impact on the real-estate market from some of these “upside-down” mortgages was a flood of distressed properties for sale that hammered down home prices because these homes typically sell for less than their market value.

While many of the short sales and foreclosures got snapped up by investors or regular homeowners, “seriously underwater” homes remain a problem in Florida, many say.

A new report by RealtyTrac says that 31 percent of homes in Florida were seriously underwater in the first quarter of the year. That means the combined loans amount secured by the property is at least 25 percent higher than the property's estimated market value.

While some homeowners with negative equity continue to live in their homes and make payments, others are either delinquent or in foreclosure.

At 15 percent, Florida continues to lead the country in the percentage of distressed properties, indicating that while the problem has declined it continues to dog the state.

Florida had the highest number of completed foreclosures over 12 months ending February and the highest rate of serious delinquencies, defined as loans 90 days or more past due, according to CoreLogic, a data compilation and processing company.

CoreLogic estimates that the Sunshine State's foreclosure inventory as a percentage of all mortgaged homes is 6 percent, which though the second highest in the nation, is a 3.9 percent drop since last February. The foreclosure inventory represents the number and share of mortgaged homes that have been placed into foreclosure.

Write a Comment
CAPTCHA Code Image
Type in image code
Change the code
 Receive China Post promos
 Respond to this email
WSJA
Subscribe  |   Advertise  |   RSS Feed  |   About Us  |   Career  |   Contact Us
Sitemap  |   Top Stories  |   Taiwan  |   China  |   Business  |   Asia  |   World  |   Sports  |   Life  |   Arts & Leisure  |   Health  |   Editorial  |   Commentary
Travel  |   Movies  |   TV Listings  |   Classifieds  |   Bookstore  |   Getting Around  |   Weather  |   Guide Post  |   Student Post  |   Terms of Use  |   Sitemap
  chinapost search