Unfortunately, it is not a surprise to us that more and more Americans are at risk of losing their home. Some might be able to save their homes and others are not as fortunate. The First American report found that 5.3 million U.S. homeowners have mortgages that are 20% higher than their homes value. First American Core Logic’s chief economist, Mark Fleming stated that those who owe more than 120% of their homes value are more likely to default. Sanjiv Das, who is the head of Citi group’s mortgage unit, said the only chance they might have is to completely restructure their loan also including a principal reduction. Those who are less than 20% under water have a better chance of keeping their homes. Mortgage Bankers Association states that at the end of September, 7.5 million households were 30 days or more behind on their mortgage payments or in foreclosure.
Another interesting fact is that over 40% of the borrowers who took out mortgages in 2006 are now under water. This was a time where the housing market was selling houses way over their true value. The article reviews a situation of an individual who bought their home in 2004 for $530,000 and now their home is worth less than $300,000. This case is not unique because there are many similar cases that relate to the situation this homeowner is in. Leaving your home is a difficult step to take and there are many home owners that do not want to let go of their home, even though it is worth much less than what they bought it for.
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