A homeowner’s equity is the market value of a property minus the mortgage debt. And homeowners’ percentage of equity has declined steadily even as home values surged during the housing boom due to a jump in cash-out refinancing, home equity loans and an increase in 100 percent financing.
So, all those complex subprime mortgages that were supposed to increase homeownership actually undercut the No. 1 reason realtors and the mortgage industry offer in support of homeownership.
Beyond that, nearly 8.5 million homeowners had negative or no equity in their homes, representing more than 16 percent of all homeowners with a mortgage.
And, that means there’s potentially as many as 8.5 million walkaways, jingle-mailers, or whatever you will.
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