‘Underwater mortgages’ continue to plague homeowners
By Pallavi Agarwal, Highlands Today, Sebring, Fla. | |
McClatchy-Tribune Information Services |
In 2005 he bought a home, expecting to live in it until he "dropped dead."
He said he put down
When Moses closed on the deal, it was the height of the real-estate boom. The real-estate bubble burst a couple of years later, and Moses' home value plummeted.
He still owes
He said he tried to renegotiate his loan and bring down his
Moses' situation is familiar to many others who either bought a house during the boom time, refinanced their homes for a larger mortgage or got an equity line of credit when their home values ballooned.
"Of course, the market tanked, they lost their jobs and couldn't service their loans," said
The most immediate impact on the real-estate market from some of these "upside-down" mortgages was a flood of distressed properties for sale that hammered down home prices because these homes typically sell for less than their market value.
While many of the short sales and foreclosures got snapped up by investors or regular homeowners, "seriously underwater" homes remain a problem in
A new report by RealtyTrac says that 31 percent of homes in
While some homeowners with negative equity continue to live in their homes and make payments, others are either delinquent or in foreclosure.
At 15 percent,
Locally, distressed property sales continue to be fairly significant although they have declined.
Fruit said from
"We are still seeing distressed properties," said REMAX Realty Broker
Realtors say it's hard to tell how many "underwater" or "upside down" mortgages we have in
The company generated statistics on homeowners' negative equity nationwide, which can be searched according to zip code.
They matched the estimated value of a home to all outstanding mortgage debt and lines of credit. Credit reporting agency TransUnion supplied the data after removing "personally identifying information," the company explains.
Moses, for instance, estimates he has put more into his home than it is worth right now.
According to figures provided by the
So, there could be several people like Moses out there.
In 2004, the clerk's office recorded 7,415 mortgages and 16,834 total deeds. That number went up significantly in 2005, which saw 24,143 total deeds and 11,055 mortgages recorded.
In 2006, total deeds recorded dropped to 12,481 and recorded mortgages to 9,354. The 2007 figures were 7,624 deeds, of which there were 6,840 mortgages were recorded.
A 2011 study done by Florida Tax Watch, comparing the state's 67 counties' expenses and revenues, gives a telling picture of how the real-estate bubble burst affected not just homeowners but the county's taxing entities.
The county's total property tax levy between 2007 and 2010 plunged by 26.26 percent, the study states. Property tax revenues fell because the appraised values of the properties, which determine how much in ad valorem revenue the government can collect, plunged. Only
Fruit said the median sale price of a home in
While other places in
Fruit said the median sale price is back to 2002 estimates. At 2 1/2 times the median family income of
Homeowners who owe more on their home than it is worth can avail of some government programs.
Announced in September,
Cecak Green, spokeswoman for the
Seventy-seven county residents applied for the money, she said.
The application process, which was done online when the program was launched, closed within a week after
Green said they will know more next month whether they will reopen the application process.
Eligible underwater homeowners with
Typically, these underwater homeowners cannot refinance their homes because of a decline in their home's value, leaving them with less-than-required equity in their homes.
"The program is designed to provide these borrowers with an opportunity to refinance by permitting the transfer of existing mortgage insurance to their newly refinanced loan, or by allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage," HARP explains.
In 2012, the government expanded the program, and since its inception in 2009, there have been more than 3,114,897 refinances completed through HARP, 287,016 of which were in
"Last year FHFA launched a national education campaign on HARP and created a website, HARP.gov, to help inform those eligible homeowners about HARP," she added in an email.
HARP Eligibility
Below are the basic HARP eligibility criteria:
Loan must be owned or guaranteed by
Loan must have been originated on or before
Current loan-to-value ratio -- LTV -- (outstanding mortgage balance/home value) must be greater than 80 percent. There is no LTV ceiling.
Borrower must be current on their mortgage payments at the time of the refinance.
Payment history -- borrower is allowed one late payment in the past 12 months, as long as it did not occur in the six months of the refinance.
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