The underwater mortgage problem will probably deteriorate before it improves. Home inventory level is still at an extraordinary high. The Wall Street Journal reports that it would take 103 months to "sell off all the foreclosed homes in banks' possession, plus all the homes likely to end up there over the next couple years, at the current rate of sales." The size of that excess inventory, in addition to homes that are for sale under normal circumstance, should keep home prices low for several years. That leaves people with mortgages greater than the value of their homes trapped in a financial vice. And in the following ten states, people are feeling it the most.
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