According to this article on CNNMoney.com, over 25 MILLION mortgage holders will be underwater by 2011. (Click here for full article.)
That means that nearly HALF of all mortgage holders will owe more on their homes than their homes are worth in 2011.
When housing prices were going up, times were good. During the boom when housing prices were REALLY going up, times were REALLY good!
But in today’s world of devaluing home prices, home prices that are correcting from the bubble, a lot of people are finding themselves UPSIDE DOWN. UNDER WATER. These homes do not just represent homes bought during the boom, but also homes that people refinanced during the boom.
What to do?
Well, you could just stay current on your mortgage. And hope you don’t have to sell your home.
Or, you could attack your mortgage, and beat it at its own game.
Interestingly, who is at fault for the defaults? It was the very people who were supposed to benefit from the reduced lending standards. From the article….
Basic conforming loans: 16%. These loans, which limit the mortgage balance to home value, were the best performing, according to Deutsche Bank.
Prime jumbos: 26%. These mortgages are of such high value that they extend beyond the cap limits for loans bought or backed by Fannie Mae or Freddie Mac.
Alt-A loans: 49%. These notes were usually issued to borrowers with good credit scores who could not or would not provide full documentation of their incomes or assets.
Subprime loans: 50%. This is what many borrowers with poor credit history were forced to rely on.
Option-ARMs: 77%. AKA negative amortization loans are the worst performing loan product of all. Under the terms of these mortgages, borrowers could make minimum payments every month — payments that did not even cover the interest of the loans. Instead of balances shrinking over time, the amount owed grew.
We will be paying for this for a long time.
What to do? $1 = 5 Bucks. Get your copy today!
