I am re-printing this (edited) response to the graphic below… The author brings up a good point.
Is it just me that wonders what percentage of the 15.8% means nothing? There are many people who purchased at the height of the market, or refinanced and took out their equity… and, they continue to make their mortgage payments. Aside from their home value being less than what they owe, they are doing just fine.
I know, I know, you are going to say “but what if they were to lose their job?” Well, hasn’t this always been the case? There are many responsible people who took mortgages knowing that they COULD afford it and now find themselves underwater… but, are making their payments and plan to continue doing so!
This “underwater” phenomenon reads in the media like a doomsday prediction. Much like the “foreclosure reports” that treat those in ANY stage of mortgage delinquency, as if they were all actual foreclosures, these attitudes fuel the fires of fear and continue to slow potential buyers from becoming home owners.
Source: KCM Blog, September 23, 2011 comment from Pete Sambets
