Mortgages Blog

Finance Blogs » Mortgages » 10 million homes upside-down

10 million homes upside-down

By Polyana da Costa · Bankrate.com
Wednesday, March 20, 2013
Posted: 10 am ET

About 1.7 million homes that were worth less than the mortgages on them regained equity as home prices rose in 2012, according to a report by CoreLogic.

This is certainly another sign that the housing market continues to improve. But remember, there are still 10.4 million homes underwater nationwide and more than 2 million homeowners with less than 5 percent equity, the report shows.

At least 1 in every 5 homes with a mortgage was upside-down at the end of the year, according to CoreLogic.

Certain states face a direr situation.

In Nevada, more than half of the homes with a mortgage are upside-down. In Florida, 42 percent of homes are worth less than what the homeowners owe on the mortgages, followed by Arizona with 38.6 percent, Georgia with 35.6 percent and Michigan at 32 percent.

"There is certainly more to do, but with fewer borrowers underwater, the fundamentals underpinning the housing market will continue to strengthen," Anand Nallathambi, president and CEO of CoreLogic, said in a statement. "The trend toward more homeowners moving back into positive equity territory should continue in 2013."

What can you do if you are underwater?

Many homeowners with little or no equity try to minimize the financial damage by refinancing to lower their monthly payments through the Home Affordable Refinance Program, or HARP, a government-sponsored program that allows borrowers to refinance regardless of how underwater they are.

More than 1.1 million HARP refinances were completed in 2012, according to a recent report by the Federal Housing Finance Agency. The program expires at the end of the year.

If you think you may benefit from a HARP refinance, this infographic can help you determine eligibility.

Follow me on Twitter @Polyanad.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
7 Comments
Truman Green
November 25, 2013 at 7:13 pm

Karol and Tim B, my heart really goes out to both of you. I didn't really understand that it got so bad that you could owe twice or more than the value of your home. There comes a time that one might consider piling everything into your car and just driving, until you find a little home you can rent that would be commensurate with your income.

Best Wishes!
Truman Green

Rick Havunen
November 05, 2013 at 2:29 am

Like stocks, over time prices rise. Being upside down is temporary, although many are there of their own doing, such as refinancing to pull equity out, buying to " flip", mortgaging more than they should have, and putting too little down.

Mike
April 04, 2013 at 4:28 pm

Does this mean that the HARP 3.0 program is poised to happen? I hear it's being held up in Washington. HARP 2.0 is not able to help me due to my loan not being backed by Fannie/Freddie.

Tim B
March 26, 2013 at 8:05 pm

Karol, I'm hosed too. I bought a house in 2004 and owe about 220k on it, its worth around 140k but there's no help for me. We moved from the home in 2008 because of work and I've been renting the thing out at a loss every month and have been doing so for over 4 years. I've been waiting but the markets are going up in value INCREDIBLY SLOWLY so the odds of me being able to hold onto it until I can sell it decrease every month. Not eligible for HARP or anything else. Would have been happy to sell if for what I owed instead of renting it or any point since.

Karol Hystad
March 21, 2013 at 10:51 am

I am underwater with an adjustable loan and have no equity.
I owe about $245,000.00 and my home is worth maybe $100,000.00
I filed a chapter 7 over three years ago to be able to stay in my home and make payments. They modifyed the loan and tacked money on the end of my loan. I am retired and disabled and barly making my mortgage, along with rising medical bills, rising utility bills. I shre this with a family member making $11.00 an hour who has her own bills to pay as well. Where and when will there be help for us.
thank you Karol Hystad