May 31st, 2012
Zillow recently released a report that showed while home values are on the rise, many homeowners are struggling with significantly underwater homes.
More than 31 percent of homes with mortgages were reported to be underwater during the first quarter, despite many Americans paying their loan payments on time, the firm explained. In all, underwater homeowners in the U.S. owe approximately $1.2 trillion more than the properties are worth.
Furthermore, total negative equity began to increase as the quarter ended, which could be due to the slowed growth of foreclosures during the robo-signing issues in 2010.
“While it was disappointing to see negative equity numbers remain so high, it is important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners,” said Zillow chief economist Stan Humphries.
Underwater mortgages can complicate the homeselling process and be a significant roadblock for corporate relocation attempts. This is why it is important to keep in mind advanced planning for these situations to know what a person and their company has to deal with for the transition.