According to the research gathered by core logic and analyzed by Allen Brodetsky, President of ASB Capital & Boutique Realty, almost 11,000,000 properties, which equates to roughly 22.5% of all US homes, have negative equity in their home.
Alarming Real Estate Trend on the Horizon
The first two quarters of fiscal year 2011 have shown a declining trend in foreclosures. This can be attributed to the Robo signing fiasco with many of the major lending institutions. That story is now behind us. Many mortgage lenders including Bank of America, the nation’s leading mortgage servicer, have fired up there foreclosure machines and are beginning to replenish their supplies of real estate owned properties. Postponing foreclosure sale dates has become increasingly difficult if not impossible. Core logic researchers have found that nearly 3/4 of all underwater borrowers are paying above market interest rates on their home loans. The chance for borrowers to endure negative equity is increasing day by day. JP Morgan Chase analysts expect home prices to drop another 5% by the beginning of 2012.
President Obama and his administration have continued to work on proposals to boost refinancing activity and help borrowers with minimal negative equity qualify for Fannie Mae and Freddie Mac loans. Ironically, some of the hardest hit markets have shown improvement in values over the last year. This can be attributed to banks foreclosing on homes in high foreclosure risk areas and flushing the market of negative equity.
Protect Your Home with ASB Capital & Boutique Realty
ASB CAPITAL GROUP and ALLEN BRODETSKY, strongly recommend refinancing your home mortgage if you are paying above a 4.75% on your home loan. Current interest rates for a 30 year fixed mortgage are hovering between 3.75 and 4%. Time may be running out to refinance if the projections by J.P. Morgan Chase and core logic holds true. As housing prices fall due to foreclosure and short sale activity, it will be increasingly difficult for borrowers to refinance with their equity diminishing. Most conventional loans require at least 20% equity to avoid paying PMI (Mortgage Insurance).