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Negative Equity Adds Another Crippling Factor

Posted Jan 31, 08 6:45 PM CST in US,  Business 

(Newser) – Foreclosure is scary enough, especially at its current pace—79% more US homes foreclosed in 2007 than the year before. But, Forbes writes, the housing crisis is dumping an even scarier problem on mortgage holders around the country: negative equity, in which a mortgage is worth more than the house for which it was borrowed.

Where is negative equity the biggest problem? The county encompassing Detroit tops the list, with 10,622 homes in foreclosure and with negative equity—and with 176 at $100,000 or more. But with housing prices continuing to fall and mortgages’ adjustable interest rates continuing to rise, negative equity seems likely to affect more Americans in the months to come.
Source: Forbes

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A sign in the window indicates a foreclosed home Tuesday, Jan. 29, 2008, in Artesia, Calif. The number of U.S. homes that slipped into some stage of foreclosure in 2007 was 79 percent higher than in the...   (Associated Press)
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver in this Aug. 29, 2007 file photo. (AP Photo/David Zalubowski, file)   (Associated Press)
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver in this Aug. 29, 2007 file photo. The IMF lowered its forecast for U.S. growth, predicting the economy would...   (Associated Press)
An auction sign rests in front of this foreclosed home in Shaker Heights, Ohio in this Tuesday, Oct. 30, 2007 file photo. The city of Cleveland, an epicenter of the nation's home foreclosure crisis,...   (Associated Press)
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NEGATIVE EQUITY THREAT TO 3M HOMES. (The Daily Mail (London, England))

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HOME-OWNERS FACE NEGATIVE EQUITY CRISIS ; Thousands see prices fall below their... (Evening Standard - London)

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One in ten faces negative equity; House prices are falling. (The Daily Mail (London, England))

1m homes 'in negative equity trap by the end of 2009'. (The Daily Mail (London, England))

1m homes facing negative equity by the end of 2009. (The Daily Mail (London, England))

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1.7m facing negative equity on home loans. (The Daily Mail (London, England))

Negative equity looming as house prices plummet; Record falls mean average... (Western Mail (Cardiff, Wales))


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