The next wave of foreclosures will be a TSUNAMI!
The defaults will come from 16 Million Americans paying on "underwater" home mortgages.
These mortgages represent about
1.2 TRILLION DOLLARS of negative home value.
No problems......No worries....no threat of Moral Hazard ("walk-away")
On average,
U.S. homeowners owe $75,644 more than what their house is worth, or 44.5% more than current value. Almost 5% of U.S. homeowners, with a mortgage,
owe more than twice what their house is worth (full report
HERE)
According to a MSNBC report (Here) using data from Zillow:
Despite the temptation to just walk away and mail back the keys also know as "Jingle mail"
90% of the underwater borrowers are making their mortgage & home loan payments on time, and ONLY 10%
are more than 90 days delinquent. Here ..look at the chart... see for yourself
"Negative equity will continue to weigh on the housing market, it also puts millions of owners at greater risk of losing their home if the economic recovery stalls,"
said Zillow chief economist - Stan Humphrie.
Hey Stan....what economic recovery are you referencing?
To prove he is the
Master of the Obvious... Stan added this earth-shattering comment:
"If economic growth slows and unemployment rises, more homeowners will be unable to make timely mortgage payments, increasing delinquency rates and eventually foreclosures,"
Way to go Stan....thanks for that information. You say your an Economist...wow...that is way cool...you really have a handle on this underwater issue. Again no worries Stan, I see the chart and it assures us people will certainly keep paying on their underwater mortgage and obviously have no problem remaining a mortgage debt slave..... lets say....oh maybe.... for another 20 or 30 years. By the way - that chart comes with a Zillow Guarantee right? I mean we can rely on that data going forward ...right? How many years can we count on that chart Stan? Regardless, it must be 'good stuff' cause your an economist (expert?) and your kinda telling us - this is still good news. And Stan - Don't forget the tag lines
Mortgage rates are at an all time low!!! and now is a great time to buy!!! and lets see what else...what other bank/realtor speak can we tell the news readers at faux(Fox) and CNN.
OHIO FRAUDclosure asks......How much longer will American homeowners continue to pay on underwater mortgages that were based on falsely inflated (bogus appraisals) values? What useless bank loan mods or phony "life preserver" government programs will be offered? You know - the programs designed to trick and trap (Hamp, Hope, Harp etc.)
When will American Homeowners STRATEGICALLY DEFAULT?
Lets ask the Mortgage Bankers Association for an answer on this underwater crisis.
They saw this crisis coming 2 years ago and faced an underwater loan on their headquarters.
They have to know what is best - go ahead - ask em:
What would the Mortgage Bankers Do?
The CEO of the Mortgage Bankers Association, John Courson said underwater borrowers should keep paying their mortgages and
"should not walk away from lawful debts"
In an interview on this topic (in 2010!) Courson appeared genuinely concerned adding:
"What about the message they'll send to their family, their kids and their friends?"
Obviously, Mr. Courson was not just speaking as a defender of financial institutions. Clearly, he was showing how much he cares for people and their personal relationships. He believes the children are our future. He thinks we should teach them well and let them lead the way. That we should show them all the beauty they posses inside. Give them a sense of pride. To make it easier, let the children’s laughter remind us how we used to be
Read Mandelman Matters: How to Strategic Default? Ask the MBA (
HERE)
Picture of current recovery....courtesy of Calculated Risk Blog (HERE)
