Upside Down?
You are not alone. Many of you have tried to get a modification only to have your bank say no, or counter you to a Short Sale. Homeowners are scratching their head trying to figure out why nobody is helping them.
Watch as Jonathon Jarvis explains the "Crisis of Credit" so you have a better understanding of the mess each of us faces, and why there have not been any good solutions for homeowners.
FACT: As of the 2nd quarter 2011, there is about $13.7 trillion in total U.S. mortgage debt outstanding. There are about $8.5 trillion in total U.S. mortgage-related securities. About $7 trillion of that is securitized or guaranteed by government sponsored enterprises (GSE's) or government agencies, the remaining $1.5 trillion is pooled by private mortgage conduits.
Source: Wikipedia
22.8% of Homes (11.1 Million) have Negative Equity
The Total Mortgage Debt of Underwater Homes was $2.8 T (4th Q 2011)
The negative equity share is back to the same level as Q3 2009
Source: Corelogic
If you are a homeowner who is upside down, you can see why on the chart below. As home prices increased, so did profits for wall street, the ratings agencies and the real estate industry.
ARE YOU IN THE TOP 5%?
Ted Gayer of The Brookings Institute estimates that just 5 percent of total underwater mortgages will qualify for principal reduction. Of these eligible borrowers, the average underwater homeowner would receive about $20,000 in principal reduction, although the agreement mandates bigger reductions for the most distressed borrowers that could raise the total amount of principal reduction to $34 billion.
How do you receive a principal reductions?
As it turns out, there are strict conditions on who can qualify for principal reductions: Homeowners have to be facing imminent default, they can’t be backed by Fannie or Freddie, they must occupy their home, and their mortgages have to be serviced by one of the five firms that were part of the agreement.
Now, there is help for Homeowners......
