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More US mortgages 'underwater'

The number of American homeowners with negative equity is up to 28.6%, but foreclosures are down, according to Zillow.

By MSN Money Partner Nov 9, 2011 3:42PM

This post comes from Prashant Gopal at partner site Bloomberg Businessweek.

 

Bloomberg Businessweek on MSN MoneyThe number of U.S. homeowners who owe more than their properties are worth climbed in the third quarter as lenders repossessed fewer houses, according to real-estate data provider Zillow.

 

The share of borrowers with negative equity rose to 28.6%, up from 26.8% in the second quarter and 23.2% a year earlier, the Seattle company said Tuesday. Last quarter's portion was the biggest since Zillow began tracking the measure in the first quarter of 2009, when 22.3% of households were "underwater."

 

The number increased because fewer delinquent properties are being taken over by banks, said Stan Humphries, Zillow's chief economist. Banks have slowed the pace of seizures as they negotiate with state attorneys general probing the mishandling of foreclosure documents.

 

"We still have very high negative equity rates," Humphries said in an email. "That's putting extreme pressure on households because temporary job losses translate into foreclosures at much higher rates when the household is in negative equity." Post continues after video.

 

Foreclosure filings in the United States declined 34% in the third quarter from a year earlier, RealtyTrac said Oct. 13.

 

Lenders are getting more aggressive with severely delinquent loans, Fitch Ratings said in a report Monday. The rate of foreclosure starts on loans that were at least 10 months delinquent climbed to 12.3% in October from 6.7% in May, Jonathan Hoke, a Fitch analyst based in New York, said in a telephone interview.

 

The Zillow Home Value Index dropped 0.2% from the second quarter and 4.4% from a year earlier, the company said. Home values fell from the previous three months in 105 of the 157 markets measured. The only increases among the 25 largest cities were in Detroit, Boston, Denver and Pittsburgh. Washington and Fort Myers, Fla., had declines in the third quarter after two consecutive increases.

 

More on Bloomberg Businessweek and MSN Money:


 

19Comments
Nov 9, 2011 5:46PM
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Those who tried their very best see no light at the end of the tunnel. Leaders of our country have stood by and let it happen. The next election is coming and watch out for the person blowing a lot of hot air. Fast talking attorneys are out. They talk the talk but cannot walk the walk. Real estate needs to recover first - not last. Seems like the priority in America is snooping into other countries business and not minding their own.
Nov 9, 2011 9:48PM
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 None of the crooks who helped engineer this mess were trying to screw the American people...they were trying to get rich.  But nothing happens in a vacuum in the zero sum game on Wall Street.  Chuck Prince, ousted CEO of Citi, when asked why on earth would his firm continue trading (and originating) in extremely risky sub prime mortgage securities and credit default swaps, replied "you keep on dancing until the music stops." HEY AMERICA THE MUSIC STOPPED    This attitude and the system that aids and promotes it, nearly killed the economy.  Its not about Republicans or Democrats...its about greed,greed and more greed and letting them get away with it.    WHERE ARE THE CRIMINAL CHARGES AGAINST THESE CORPORATE THIEVES.....Goldman Sachs could not have taken  over the entire government if the American people didn't spend  so much time watching football,  Dancing with the Stars, American Idol and going ooh-aah over the rich and famous than they do on the state of their nation.           
Nov 9, 2011 6:50PM
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I see homes being built all the time. What's wrong here?
Nov 9, 2011 6:42PM
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Prices are still too high and won't go higher untill the market is cleared, which means that prices still have to fall..
Nov 10, 2011 8:31AM
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The Great Depression continues 5 years and going Strong
Nov 9, 2011 5:34PM
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Question:

The countries economy seems to be indicated by the real estate market.  How is that possible, its just a product like food.

What ever happened to food, clothing and shelter. Next big item waiting in the wings is Food for wall street to destroy.

 

Shelter when south and wall street had enormous gains. Something is wrong. duh.

 

I need to ask MICHAEL MOORE

 

Or Bill Clinton , the next big landlord for vacant housing.

Call your rental agent , Billy boy Clinton.

Nov 10, 2011 3:53AM
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What do you expect when most US factories have moved to Asia.  Over the past 6 years i've seen this economy go down hill.  I've been out of a job for 5 years at 60 years old.  The european crisis is only going to make it worst here because americans and businesses hold alot of european bonds.  

It's only a matter of time until we have a great depression that will make all others look like a walk in the park.
Nov 10, 2011 11:31AM
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according to the other headline story for today, it claims foreclosures are up seven percent for october, thats not less forclosing by the banks, good thing ole fanny and freddie want another six to seven billion dollars of taxpayers money so they can manipulate there books to pass out those multiple million dollar bonus's they've already agree'd on giving at the end of the year, even though they're obviously broke and don't have the money for bonus's, but hey what better than taxpayer funded multi-million dollar bonus checks
Nov 9, 2011 10:32PM
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uh oh, I think I left some oil on the stove!!! Oh well my insurance is up to date
Nov 10, 2011 11:16AM
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When are these so called "investigative journalists" going to actually do some investigating. They choose to report on "data" from Zillow? Really? Instead of getting data from say, HUD or the National Association of Realtors, they go with a back-of-the-cereal-box data source like Zillow. America IS doomed if we continue to believe everything we hear and continue to trust the "source" because they said, "trust me".

 

It's pretty bad when China starts looking like a safe-haven.......

Nov 9, 2011 7:43PM
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Remember the words fuzzy numbers, if you believe this report go ahead buy a house now, SUCKER.
Nov 9, 2011 7:40PM
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the big reason that i have seen is they would rather foreclose on someone versus take a 20% cut on the principle even though I had to at work because of the crisis, they were at least 25% at fault in I personally think MORE then they sell it for less than they were offered from me.

 

my value went from 162000 to 49000-55000 kind of big hit i had asked them to roll a 10k 2nd into the 1st refi me into 15 yr note would of saved 200 per month they said no  the value wasnt in the house. after 14k over 13 months i quit paying on the dead horse they kept refusing to help in any way even after the FHA offered the HUD # 10-173 for underwater home owners fannie and citimortgage both said they work with that but they wont due a principle write down which is required by the code.

Nov 10, 2011 11:59AM
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Can anyone explain why elected officials don’t want regulations put on big banks? Realtors and mortgage brokers are to blame for a large part of the foreclosure problem…

It always amazes me when I hear of huge corporations firing thousands of employee’s and turn right around and give million dollar bonuses to the head CEO…

I just doesn’t make sense to fire so many and give one person millions of dollars… Where’s the cost savings there?

Nov 9, 2011 11:05PM
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Thanks Obama! While you are giving loans to failed green companies, who by chance another investor is one of your biggest donor . Your a Crook Obama that your Buddy from Chicago Al Capone would be proud of..  I like all the Openness of your Administration. We lose our homes and you give the money away to wall street, banks , millionaire, And corruption filled unions. You have the silver tongue of the devil,soon truth will shine a light on your corruption. Wall street protestors should be marching around the White House until you resign.
Nov 9, 2011 7:02PM
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I've seen prices stay the same in some areas and fall in others. Just depends if you overpaid for you house. A lot of new track homes were overpriced. Older neighborhood didn't see the hugh swings and stayed pretty stable and will continue to do so, while you will see the cheaply built track homes fall as the houses deteriorate and the market moves away. Some of the newer homes built by quality developers are actually still doing well but those individuals tend to be financially secure.

Nov 10, 2011 1:49PM
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Instead of "giving" more to the banks who just keep it for bonuses... for a change offer it to people who are under water to refinance at lower rates from loans written by these bankers who caused this problem driven by their greed.

 

Lower payments would mean more money would be pumped into the economy...

 

Trickle "down" did not work ( it went into the huge bonuses) ...why not try trickle up?

 

It's the taxpayers (99%) money help them with it. Tax payers need assistance not banks to be given out for the 1%'s bonuses.

Nov 9, 2011 7:59PM
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so let fannie take it in the rear, if the government would quit bailing them out all the money they have spent on fannie mae they could of wrote down every loan out there at a percentage per year of loan left they will get it back in the intrest they would of gotten versus dropping the intrest rates on just the loans that are above water its the ones that are 40-50% or more under water that really need the help I would of had to throw away 100,000 dollars over the next 6-7 yrs just to get the principle down to the value unless they would remove all interst till I got back to level But we all know that didnt work either.
Nov 10, 2011 12:52AM
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Hey! Dumbworker I'm back. It sez in the good book(bible) not to mix words with someone that loves to talk like you. So i won't.
Nov 9, 2011 8:57PM
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Someone(dumbgmworkers)

YOU are the dumb one.  Ever heard of punctuation, grammar, etc?

Ever heard of an education?

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