wow. 69.9% of mortgages in Nevada are under water. wow.

[Liberal_in_LA]

Last week, The Chronicle reported that underwater mortgages are on the decline: that because of increased foreclosures on distressed properties, the number of American homes with mortgages that exceed the properties' value has dropped. But again, foreclosures, rather than rising home prices, accounts for the drop--not then a positive sign.

For a more detailed look at this phenomenon, here is a list of the top 15 states in our union for underwater mortgages.

1. Nevada: 69.9% of all mortgages
2. Arizona: 51.3% of all mortgages
3. Floria: 47.8% of all mortgages The great state of 'Floria'. hee
4. Michigan: 38.5% of all mortgages
5. California: 35.1% of all mortgages
6. Georgia: 27.8% of all mortgages
7. Virginia: 24.3% of all mortgages
8.-13. South Dakota, Maine, West Virginia, Wyoming, Louisiana, and Mississippi: 23.8% of all mortgages
14. Maryland: 22.9% of all mortgages
15. Idaho: 22.7% of all mortgages

Though we've heard the term "bail out" more times than we care to, we might be hard pressed to see what, if any, real help is being offered to drowning homeowners. Cavan Hadley, a homeowner and father of two in Morro Bay, California, put the situation-- sadly-- as follows:

"On the verge of losing my house in Morro Bay. Been working with Bank of America for over a year. But apparently the loan modification program wasn't aimed at people, just press releases."

Read more: http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?entry_id=71252&tsp=1#ixzz0yDGaIVqe

[joeybee12]

1. "wasn't aimed at people, but press releases"

Sad, but true.

[Hawkowl]

2. This is why Angle has a chance

Fear. Mind freezing, gut clenching, lose your bowels type of fear. The kind of fear that you have no job and are going to lose your home will make people vote for any type of change they are presented with. The vote out of desperation.

Frankly, I'd be surprised if Harry Reid pulls off re-election.

[Hannah Bell]

3. i'm guessing that part of that = a high percent of "investor"-owned properties in the 3 leading

states.

[marginlized]

4. Amazing the numbers are still that high

It's kind of understandable that Nev. would be hit so hard. Everything I read about their market was that flippers and "investors" were piling in. But that nearly a quarter of mortgages in South Dakota are also underwater. The rest of the numbers just show how transient everyone is. The idea that you buy a home and stay put for any length of time is a myth. The 30 year "relationship" with a financial lender is such a pretense.

[prairierose]

7. And in SD. I would guess that the majority of those...

underwater mortgages are in 2 markets.

[uncommon]

5. This is what happens when banks issue interest only loans and the like.

Of course mortgages are underwater - people are in financing schemes where they are not paying back the principle.

[RB TexLa]

6. The value of the property has no effect on the persons ability to pay their mortgage.

[JVS]

8. This is true. You don't lose your home for being under water.

[Liberal_in_LA]

9. Yup. And each payment lowers the mortgage balance. people forget that

[Romulox]

17. Um, it means that an owner who runs into trouble won't be able to cover his loan with a sale.

And therefore a foreclosure is more likely. Think this through a bit harder, ok? :hi:

[jberryhill]

18. +1 100% of renters are "under water", as they have no equity stake at all! /nt

[gratuitous]

10. The loan modification program was designed for the mortgage holders

It was meant to stretch out the defaults a little bit, and give the big finance boyz time to find other assets and revenue sources so their bottom lines wouldn't look quite so bad. If a family was actually helped to stay in their home, well, that was just ancillary. Not really meant to happen, but if it did, fine.

The next big wave of financial market meltdown will come when assets have to be assigned their true market value. A mortgage default of $800,000 on a million dollar property doesn't look so bad. But when the property value is adjusted to its more realistic market value of $650,000, that $800,000 default looks pretty bad. The financier isn't going to get full value for the loan, no matter how you look at it. Right now they're hoping against hope that the real estate bubble somehow reinflates itself.

[closeupready]

11. Those statistics are just so unbelievable - the scale of losses is mindboggling.

And to think that it will get even WORSE. :scared:

[SoCalDem]

12. For a decade or more, "EZ-Credit"..nothing-down mortgages

"created" a market for the gazillions of spec-homes that were built in boom-areas. (I live in one). Builders went buck-wild, putting houses up, and had to have buyers, so lenders created buyers out of thin air many times.

Once the promo-time ended and the real mortgage payments kicked in, many could never keep up....and every boom eventually ends, and the jobs go away.

Incomes have not kept up with housing prices.

All you have to do to get a peek into the problem, is to watch HGTV House Hunters (the shows from 2006-08) and you will see realtors showing people of very modest means, houses that cost $350-$500K , and telling them what a "good deal" it is. It's eye-opening. A couple with a wife in grad school & a guy with a regular job, planning out their lives on paper...with a $2500 a month mortgage....and no down payment.

[damntexdem]

13. Didn't know there was that much water in Nevada.

;-)

[ljm2002]

14. No worries...

...all of us in Nevada with underwater mortgages are just stupid and greedy. I know because I've been told that, right here on this board, by someone pushing the "personal responsibility" meme.

[TheWatcher]

15. Butt Teh Stcok Mrketz Is Aboove 10K. Everyingz GOOOOOODZ!!!!!1111

:crazy:

[BlueCheese]

16. 70%???

That's astonishing. There you really might try that famous "everyone default and move one house to the left" approach.

Also, an interesting statistical anomaly that there are six states tied at 23.8%. What are the odds of that?