For Underwater Borrowers, The Outlook Gets Worse And Worse

About a quarter of American mortgages are underwater. What is owed on the mortgage exceeds the value of the home. As homeowners get increasingly underwater, they have more incentive to default on their mortgage.

As a result, foreclosures boom and property values decline, leading to more homeowners going underwater and a vicious cycle ensues.

Here’s more: Furthermore, the poll also revealed that only a third of American workers with a home mortgage “perceive their savings to be sufficient,” and that the growing concern about job loss is causing more and more homeowners and would-be homeowners to seriously consider renting instead of home ownership. Doug Duncan, Fannie Mae’s vice president and chief economist, blames these concerns for the fact that “consumer spending…ground to a halt in the second quarter [of this year]”[2]. He believes that as long as consumer confidence remains low, the housing market will continue to experience setbacks in its recovery.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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