'Under Water' Mortgages are Growing Threat to US
So many shoes have dropped in this financial saga that I've lost count. Here is the most recent.
As the financial crisis hits Main Street America, nearly one in six U.S. homeowners are finding themselves in the same position, threatening the U.S. economy with a new wave of foreclosures and bankruptcies.
About 12 million U.S. homeowners owe more than their homes are worth, compared with 6.6 million at the end of last year and slightly more than 3 million at the close of 2006, said Mark Zandi, chief economist at Moody's Economy.com.
Having so many people in a negative equity position on their homes is a huge problem and is further evidence that lending institutions have been incredibly reckless in their practices. This is what happens when you don't need to put anything down and the price of property drops. These losses will be eaten by the banks but we'll all feel the pain.