The Curse Of Negative Equity

miamiherald.com:

As more than $113 billion worth of home equity has vanished from South Florida's housing market in the past five years, the number of homeowners with mortgages that are larger than the values of their properties has become enormous. More than 300,000 South Florida mortgages--or 43 percent of them--are currently underwater, the highest level in decades, if not ever. That's about four times the number of homes in foreclosure.

Read the whole story: miamiherald.com

Comments

[Jill1975]

03:02 PM on 03/08/2011

While I feel sorry for people with underwater mortgages , people should have realised that prices were too high when people with $50,000 incomes were buying $500,000 houses in 2005.

[OhManOhMan]

06:48 PM on 02/23/2011

Did you know that even if your property is free and clear does NOT mean that you own the land? The Federal government owns your land. You're just the deed holder and material holder.

Nobody owns land in this Corporate America.

[yappnmutt]

05:44 PM on 02/23/2011

a house is just a building. a home is where your heart is. any building will do.

[El Chingaso]

01:09 PM on 02/23/2011

Look, I knew something was "totally" goofed up when the so-called housing boom got underway, circa early 2005. I mean, how could a depressed market, such as housing, all of a sudden -- "presto!" -- glow white hot....simply out of thin air. Well, all of the pundits in the media started pushing the fantasy over the cable and satellite systems...and, thus, it became everyone's reality. You reap what you sow, Holmes. I knew the housing market craziness in 2005-2007, respectively, was nothing more...than fool's gold. Never believe what you read & hear in the media, because they're out to get you...and "they" always win. Oh, man...

[Lakesideboy]

11:20 AM on 02/23/2011

Most people who are forced to walk away from their mortgages that are underwater have absolutely no choice if they lose their job.
The middle class have spent all of their available savings so where is the money going to come from if you can't make your mortgage payment, are forced to sell and don't have the money to do so if you are underwater??? We've been pushed into a corner while the wealthy continue to make money off of middle class suffering.
Our government (Bush and beyond) has failed us in doing their job to properly monitor these markets. Political, banking/wall street & credit card company greed have pretty much succeeded in destroying the nation.

[dadw5boys]

08:17 AM on 02/22/2011

Flordia's taxes are too high all over the state and their zoning laws are stupid !!!!

A homeowner can not repair his own home !!!!!

Have to pay someone for every repair the Insurance Company's own the freaking state avoid it

[Gneirre]

08:11 AM on 02/22/2011

Twenty five years in one home. The walls speak of past of celebrations and births of grandchildren. The doors creak of past punishments that were given for disobeying and when we would just get frustrated with the world. The floors moan from years of friends and family being welcomed at any time and the jubilation of getting accepted into that one college you wanted. Pictures are being taken down from the one entire wall known as the 'wall of fame' and packed; graduation, birthday, family holidays, and anniversaries. The room downstairs has started to cry from missed conversations of 'he's sooooooooo cute'. The kitchen is somewhat relieved, but at the same time - sad, from no longer having all of the burned meals that were attempted.

After twenty five years, countless efforts of trying to stay above their heads, realizing they owe more than the house is worth, and informing us that the maintenance alone is drowning them, I was informed this weekend that my parents have decided to walk away.

*tears*

[littlepuffycloud]

11:19 AM on 02/22/2011

How is it possible after 25 years that they owe more than the house is worth?

[spinotter11]

11:24 AM on 02/22/2011

Creative refinancing.

[Gneirre]

11:35 AM on 02/22/2011

Taking out second and third mortgages to pay for our education - 6 children and all attended and graduated from a major university, as well as predatory refinancing. (grateful but horrified. We didn't know this at the time). Even if all of us pitched in to pay the monthly mortgages and help them every way possible, it's hopeless.

[ManwithaParachute]

11:40 AM on 02/22/2011

Gee, if they never tapped the "equity" in their home they would have just five years left with very reasonable payments.

[Gneirre]

11:44 AM on 02/22/2011

Yep. A sacrifice my brothers, sisters, and I never knew they made. Three mortgages and all equity lost so that we could finish college. Needless to say, we were horrified they did this - grateful, but tremendously horrified. Their take was no matter the cost, their children were going to finish college. Wow...what love!!!! I wish we knew before now. We could have done something like take over 2 of the 3 mortgages. Didn't know until too late.

[Indigo1941]

07:50 AM on 02/22/2011

I sold a year ago at a reasonable loss and moved into a condo rental here in CenFla. I was thinking I might buy into this condo complex, it's comfortable enough but then I downloaded the financial statements and found that on page 1, everything's just fine but on page 3 the HOA payments scheduled on page 1 can't happen because those units are in foreclosure or people have walked away or they're just not paying. Now why would I buy a share of a half-million dollar debt disguised by clever accounting? Fortunately, I'm already elderly and can rent for the rest of my life without loss of face. When you pause to think about it, this Great American Dream that you have to own a house is really not good personal finances, it's just another banksterism.

[spinotter11]

11:25 AM on 02/22/2011

Loss of face? You decide whether to rent or buy to save face? I would think about that if I were you. Who cares what other people think?

[Indigo1941]

03:34 PM on 02/22/2011

Don't you have any friends at all?

[USNDC]

07:48 AM on 02/22/2011

Walk away ... but wait another until a few more million foreclosures hit the market ... and values fall even further ... thereby maximizing the lenders loss ... then walk away.

[Ed Baker]

10:50 AM on 02/22/2011

Yes those horrible lenders lent her money when she asked them to! Horrible!

[Raccoon1]

10:58 AM on 02/22/2011

Depends. Did they exercise due diligence? Lenders aren't required to loan to just anyone that applies for a loan, but many did, knowing that they would bundle and pass along the risk while they took the profits.

[littlepuffycloud]

11:24 AM on 02/22/2011

Hopefully one of those lovely lenders will prey on your parents..assuming you weren't hatched and left under a rock somewhere.

[PhilipTaylor]

05:54 AM on 02/22/2011

LINCOLN SOLVED THE DEBT PROBLEM IN AMERICA! 

 
“If that mischievous financial policy (Lincoln Greenbacks at ZERO% Interest) which had its origin in the North American Republic during the Civil war, should become permanent, then that Government will furnish its own money without cost. It will pay off its debts and be without debt. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.” 1865 editorial in The London Times
 
1865 editorial in The London Times.
1865 Lincoln is As-ass-sainted

[USNDC]

07:45 AM on 02/22/2011

Is this true ?

[PhilipTaylor]

04:06 PM on 02/22/2011

THE LINCOLN SOLUTION TO MONEY MANIPULATORS OF MARKETS:

“The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity.”


- Abraham Lincoln

[Indigo1941]

07:54 AM on 02/22/2011

It's worth keeping in mind that Great Britain sided with the Confederacy during the War Between the States. Woodrow Wilson was wrong when he conned the American public with the myth about out "cousins across the pond." Yet that foolishness persists.

[eric14]

07:57 AM on 02/22/2011

Nonsense.

[Ed Baker]

10:52 AM on 02/22/2011

Well it was only 146 years ago. :) Get over it.

[wannabesmart]

12:43 AM on 02/22/2011

Did a Bush have something to do with this state?

[JoeMar]

10:09 PM on 02/21/2011

Hey Florida, how's that "right to work" thing working for ya now. I thought all the cheap labor was supposed to make economic downturns a thing of the past.

[Ed Baker]

10:52 AM on 02/22/2011

Wages can't climb in Florida - too much illegal immigration.

[Raccoon1]

11:00 AM on 02/22/2011

Why won't they throw a few of the employers who knowingly illegals in jail? No jobs - no illegals. Before you blame drug dealing, legal American citizens deal in drugs, also.

[littlepuffycloud]

11:22 AM on 02/22/2011

So jail the businesses that hire them. What part of that equation do you not like?

[OldTulsan]

08:43 PM on 02/21/2011

Homeowners who are seriously underwater should consider a strategic default. The following site is NOT a substitute for seeking advice from a real estate attorney:

http://www.youwalkaway.com/
Foreclosure Help & Foreclosure Assistance Through The Foreclosure
Process | You Walk Away - Strategic Default Help - Foreclosure
Protection - Strategic Default Assistance

The TBTF banks do it:

http://www.totalnoid.com/2009/12/27/strategic-default-morgan-stanley-gives-properties-back-to-the-lender/
Strategic Default: Morgan Stanley Gives Properties Back to the
Lender

Even the Mortgage Bankers Association did it:

http://immoralhazard.housingstorm.com/tag/strategic-default/
Strategic Default | Immoral Hazard

"In an incredible show of arrogance and hypocrisy, the Mortgage Bankers Association is Walking Away from the 10-story, Washington D.C. building that they bought in 2007 to be their headquarters.

John Courson, CEO of the MBA once said about strategic default: “What about the message they will send to their family and their kids and their friends?”

Fittingly, the group purchased the property for $79 Million with a variable-rate loan of $75 Million – or about 95% LTV.

Though the details are murky, the property has been resold to CoStar Group Inc., for $41.3 Million…almost half of the 2007 price..."

[drkazmd65]

04:05 PM on 02/23/2011

The difference (and I am not saying I am in agreement with this) is that a business has no soul, no morals, and no responsibility to anyone but it's shareholders & owners.

So,... all you have to do is shed that "pesky" conscience and pretend to be a soulless business.

Voiles!