This is better but still not good
Alejandro Lazo, of the Los Angeles Times, reports that fewer homeowners are underwater on mortgages. The first quarter of this year saw a miniscule drop in the number of upside-down mortgages from 11.1 million to 10.9 million. That’s a measly 0.2 million or only 200,000 1 .
The decline in the number of borrowers owing more on their mortgages than those properties are worth occurred despite falling home prices, which plunge borrowers underwater.
Yes, that is because of acceleration in the rate of foreclosure sales, which take such troubled assets off the market.
Home equity loans also are contributing to the negative-equity problem, CoreLogic said. Thirty-eight percent of borrowers with second mortgages were underwater, compared with 18% of borrowers without home equity loans.
Remember that Jobless Recovery? That is when many of those second mortgages were sold. It was a way for many people to fund their unemployment after the Telco-Dotcom Crash, of 2001-2002, cost over 12.5 million jobs, most of which were not recovered during the Jobless Recovery, of 2003-2006. In fact, that 38%, or 4.2 million, looks suspiciously like those are the same folks that had no job to refinance with, in 2007, before the Great Financial Meltdown, of 2007-2008, and the jobs market puckered up tighter than a duck’s hind end.
While the US economy has been slowly healing since then, it is yet another Jobless Recovery. In fact, it hasn’t really been a recovery, although Wall Street is looking well. It is more like the economy being in Intensive Care since 2009, that’s three years folks and yes it is that sick; sicker even. The elephant in the room are the toxic assets that are still on the books and these upside-down mortgages are exactly what they are talking about.
Of course, I also knew others that bought a Ferrari with the equity but, chances are that those aren’t the ones in trouble, due to them having been eliminated from the system years ago. Stupidity generally goes broke early unless they have vastly more money than sense. These are folks that have been working hard to stretch their assets while desperately hoping for things to improve. Those that were anywhere near 50, in 2001, have probably been under-employed, at best, this entire time. Basically an unfunded but forced retirement. Some have started their own business, funded from their home equity, and others have been scraping by anyway that they could. Most have advanced degrees and are over-qualified for most jobs that they can apply for 2. Now, due to Banker greed, their home’s value has dropped through the floor, removing yet another survival tool.
The sad bit is that nothing is being done for them. They are barely on the RADAR. Most of them have no retirement savings. After ten years of this sort of hardship; who has a retirement plan? All that they have is an ad hoc survival plan; scrimping by. That’s over 4.5 million households in this position. Think about that when the next dis-compassionate Tea Partier starts kicking the next homeless and disabled engineer that can’t find work because the company insurance refuses to cover him.
- Note that, these are National numbers. [ ↩]
- These are the same folks that Junior Bush offered $5K to so that they could educate themselves in a proper [sic] vocation. [ ↩]
Mirrored from The Slamlander.
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