Startling Number of Phoenix Mortgages ‘Underwater’
When a new phenomenon hits society, it’s often accompanied by new terms and jargon, and the ongoing mortgage crisis is no different. One of the most common new terms is ‘underwater,’ which refers to mortgages where the amount owed on the loan is more than the home for which the loan was issued is worth. When a mortgage is underwater, it often starts a disastrous chain reaction that leads to a default on the loan and many times a foreclosure.
According to the Arizona Republic:
“As much as 68 percent of all Phoenix-area homeowners with mortgages are “underwater,” meaning they owe more on their mortgage than their home is worth, according to a new report from Wall Street’s Deutsche Bank Securities.
More concerning is Deutsche Bank’s research that estimates 78 percent of metro Phoenix’s homeowners with mortgages will be underwater before home prices stabilize, which Deutsche Bank estimates will happen the first quarter of 2011.
The almost 50 percent plummet in metro Phoenix home values has led to the area’s negative equity problem. The people who need to sell and can’t sell for enough to pay off their mortgages are pushing the area’s foreclosure rate up. There is a partial solution: lenders following through on more home loan modifications and short sales.”
Obviously, home loan modifications could be a way out from under this problem for homeowners who qualify. However, you’ll need the help of a home loan modification lawyer to make sure that you obtain put your best foot forward in terms of obtaining a new loan, as laws need to be followed and negotiations with the lender need to be handled properly. If you are facing mortgage problems, contact the attorneys at Phillips & Associates today to schedule an initial consultation so you can find out of a home loan modification is an option for you.
Tags: default, foreclosure, home loan modification, home loan modification attorney, mortgages, short sale, underwater