With all the recent focus on the debt ceiling talks and US Women's Soccer kicking it all the way to the World Cup Finals and the fact that most of you reading this live in the largely unaffected midwest, you probably haven't heard much lately about the mortgage mess. No, it's not 2008 any longer, but it's still quite a mess. Check out these stats...
Based on data published by CoreLogic the first quarter of 2011 (sorry, no Q2 data out yet that I've found) about 23% of all residential properties with a mortgage were underwater (meaning, they're upside down, they have negative equity, they owe more on their mortgage than their home is worth). Almost 28% were underwater or had less than 5% equity. That's 1/4 of all residential properties with mortgages in the country! Yikes.
States in the worst shape include:
Nevada - 65% of all mortgaged properties underwater Arizona - 51%
Florida - 47%
Michigan - 36%
California - 32%
Glass half full... if you're looking for a second home in a warm state, now's a great time to buy :)
I won't rehash the thousand ways we got into this mess and I'm not a 1-man think tank, but I will suggest one thing that might help...
Instead of big lenders making a mortgage to anyone with a heartbeat and then reselling that mortgage fifteen times before the buyer makes their first mortgage payment, we need more old school banking. Local banks lending local money to locals they know and keeping those mortgages in-house. Local, personal relationships are better for everyone involved. If bankers know the people they're lending to and they're required to keep the mortgages (or at least a decent percentage of them) in-house, you can bet your rear they're going to be more careful about who gets a mortgage and under what terms.
Solving the world's problems 1 musing at a time (heh, heh)!