• psst … I’m a Realtor! Thanks for stopping by my website. I would love to help you find your dream home and community in the Hampton Roads or Williamsburg area or to sell your existing home. This website is authored by local resident and REALTOR, John Womeldorf. John is known around town as Mr. Williamsburg, for both his extensive knowledge of Hampton Roads and the historic triangle, and his expertise in the local real estate market. His websites, WilliamsburgsRealEstate.com and Mr Williamsburg.com were created as a resource for folks who are exploring a move to Williamsburg, VA , Hampton Roads VA and the surrounding areas of the Virginia Peninsula. On his website you can search homes for sale , foreclosures, 55+ active adult communities, condos and town homes , land and commercial property for sale in Williamsburg, Yorktown, New Kent, Poquoson, and Gloucester, VA as well as surrounding markets of Carrolton, Chesapeake,Gloucester, Hampton, Isle of Wight, Portsmouth Mathews, Newport News Norfolk, Poquoson, Smithfield, , Suffolk, Surry, Va Beach, Yorktown and York County Virginia You can reach John by email John@MrWilliamsburg.com or phone @ 757-254-813

23% Of Mortgages Underwater

Nearly a quarter of the nation’s homes with mortgages are valued for less than the amount their owners owe the banks holding their mortgage loans, according to a depressing new report.

The report by First American CoreLogic indicates that almost 10.7 million, or 23 percent, of all residential properties are “underwater” meaning they have negative equity. The majority of such negative-equity mortgages are in states such as Nevada, Arizona, Florida, Michigan and California.

In the Hampton Roads, VA area more than 71,500 homeowners  owed more on their mortgages than the homes were worth at the end of September, according to the report .That’s nearly one in four local mortgage borrowers -22 percent – who are “underwater” on the loans.

Homeowners who purchased at the peak of the local housing boom, especially with little or no down payment or an interest-only loan, are the most susceptible to finding themselves underwater in a loan. Falling home values can erode any equity homeowners have in a newly purchased or refinanced home.

Economists and real estate experts say that owing more on a home than it’s worth is one of the most common precursors to foreclosure.

Bank repossessions and foreclosure auctions in Hampton Roads have remained at high levels in recent months, and First American’s report indicates foreclosure activity could grow, dampening the prospects of a quick housing recovery.

First American’s quarterly report, which generated data for Hampton Roads for the third time, also said that 20,629 more mortgages will be underwater if home prices in the area decline 5 percent from their current level.

Nevada had the highest percentage of underwater homes at 65 percent. (It was 58.2 percent in March.) That 65 percent is just an eye-popping statistic. Since, as First American CoreLogic’s report points out, being underwater is typically the precursor to foreclosure, it suggests the foreclosure crisis in Nevada and several other states will only get worst before it gets better.

Arizona was next at 48 percent, followed by Florida, Michigan and Calfornia.

Some of the reports key findings:

The rise in negative equity is closely tied to increases in pre-foreclosure activity. At one end of the spectrum, borrowers with equity tend to have very low default rates. At the other end, investors tend to default on their mortgages once in negative equity more ruthlessly: their default rate is typically two to three percent higher than owner-occupied homes with similar degrees of negative equity. For the highest level of negative equity, investors and owners behave very similarly and default at similar rates

The bulk of ‘upside down’ borrowers, as a group, share certain characteristics. They:

— Financed their properties between 2005 and 2008, with 2006 being the peak year where 40 percent of borrowers were in negative equity (Figure 5). Negative equity continues to be a problem even for 2009 originations as evidenced by a negative equity share of 11 percent and another 5 percent near negative equity.

— Purchased newly built homes that are concentrated in a small number of states. For homes built between 2006 and 2008, the negative equity share is over 40 percent.

— Relied on adjustable rate mortgages (ARMs)

— Bought less expensive properties. The average value for all properties with a mortgage is $270,200, but properties in negative equity have an average value of $210,300 or 22 percent less (Figure 8). The average mortgage debt for properties in negative in equity was $280,000 and borrowers that were in a negative equity position were upside down by an average of nearly $70,000. The aggregate property value for loans in a negative equity position was $2.2 trillion, which represents the total property value at risk of default, against which there was a total of $2.9 trillion of mortgage debt outstanding.

So much of the average American’s financial well-being is tied up in home values, it’s hard to see how the economy gets back on track if this underwater condition persists through vast swaths of the nation.

The answer is for home values to rise significantly. But while the S&P Case-Schiller report recently released  shows home prices rose for the fifth straight month in September, home prices based on a national average are now at autumn 2003 levels, making for six lost years.

Are you looking for foreclosures in the Hampton Roads or Williamsburg VA area ? Click the link below for a list of 700+ foreclosed properties for sale.

Looking for a Short Sale Property in Hampton Roads or Williamsburg VA ? Click the link below for a list of over 1000 homes currently listed for sale in the area.

For additional details on any property email John@MrWilliamsburg.com or call       757 254 8136  757 254 8136    757 254 8136  757 254 8136

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: