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Economy
Falling Home Prices Drag New Home Owners Under Water
2012-04-28
(Reuters) - More than 1 million Americans who have taken out mortgages in the past two years now owe more on their loans than their homes are worth, and Federal Housing Administration loans that require only a tiny down payment are partly to blame.

That figure, provided to Reuters by tracking firm CoreLogic, represents about one out of 10 home loans made during that period.

As of December 2011, the latest figures available, 31 percent of the U.S. home loans that were in negative equity - in which the outstanding loan balance exceeds the value of the home - were FHA-insured mortgages, according to CoreLogic.

Many borrowers, particularly since late 2010, thought they were buying at the bottom of a housing market that had already suffered steep declines, but have been caught out by a continued fall in prices in wide swaths of America.
Definitely got the change, but confused about the hope part.
Posted by:Snoter Speating5571

#9  Not subsidising excessive borrowers is GOOD not bad. Just need to stop subsidising banks (in reality their bondholders) now...
Posted by: Bright Pebbles   2012-04-28 09:54  

#8  Obama hasn't been paying mortgages, as expected.
Posted by: badanov   2012-04-28 09:17  

#7  Now it might not be a popular view here, but I think the economy has been structured so extracting "energy" from the economy without work seems untaxed, yet working etc is highly taxed. Seems to favour the politically connected very well.
Posted by: Bright Pebbles   2012-04-28 08:40  

#6  I agree BP. Isn't it interesting though, the "rules" they just keep changing:

1. I put money in the bank and earn interest.
2. I take out a US Savings Bond each month.
3. My company has a pension plan.
4. I prefer 12 month CD's
5. My home is also an investment.
6 My 401k plan is growing nicely.
7. My PMI is tax deductable.
8. The Alternativer Minimum tax does not effect me.
9. The sale of my house is tax exempt.del>


Posted by: Besoeker   2012-04-28 07:56  

#5  I like the Austrian school view. Houses are getting more affordable. This is good.
Posted by: Bright Pebbles   2012-04-28 07:17  

#4  To complicate home purchasing even further, try buying a "short sale" property. The price as listed may NOT be the actual price if the lending institution does not "approve" the sale, the approval of which can take months. I suspect the bank must get gov't assurances that their loan will be restored, and that is the old up.

The housing market in Georgia has YET to bottom out as many houses remain empty, abandoned and unlisted. Evidently the banks (or gov't) do not want to flood an already fully saturated market.
Posted by: Besoeker   2012-04-28 06:53  

#3  If they bought the homes to live in and not as an investment they might be OK in 10 years. If they don't lose their job.
Posted by: tipover   2012-04-28 01:31  

#2  Recent home loaners who thought they were buying at the bottom of a doomed housing market turned out to be catchers of falling knives. Hard to be left holding the bag when your fingers have been cut off.
Posted by: Anguper Hupomosing9418   2012-04-28 00:32  

#1  In related news: Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis.
Posted by: Anguper Hupomosing9418   2012-04-28 00:25  

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