The Virginian-Pilot
©
Demetrius Perry said he feels like he's shackled to his home. He bought the four-bedroom residence in Chesapeake's Deep Creek about six years ago for $225,000.
"Then after that, the price just dropped," he said. "It dropped dramatically."
He put the home on the market in January for $200,000 - about what he still owed on the mortgage. But when serious offers didn't come, he lowered the price.
His asking price now: $130,000.
"It's not a good feeling," Perry said. "It's the best of a bad situation."
As home prices across the region continue to fall, situations like Perry's have become increasingly common. A report released Tuesday found that more than a quarter of Hampton Roads homes with mortgages - 25.2 percent - are worth less than what is owed on the loans.
The number of local homeowners who were "underwater" on their loans rose 1 percent to 84,443 from June to September, according to CoreLogic, a Santa Ana, Calif.-based company that tracks mortgages nationwide.
For homeowners who aren't in jeopardy of falling behind on payments, being underwater means they are tied to their homes - unable to sell without paying their lender the difference or negotiating a short sale.
Vinod Agarwal, an economist at Old Dominion University, said sales of foreclosures and the high number of homes on the market in Hampton Roads have combined to pull down home prices in the region.
"As long as prices continue to fall, the number of underwater homeowners will grow," Agarwal said.
In fact, CoreLogic's quarterly report forecast that 23,159 more mortgages in the region would be underwater if home prices declined 5 percent from current levels. The company estimates that home prices in Hampton Roads have dropped 6.8 percent in the past year.
Homeowners like Perry who bought or refinanced at the peak of the housing boom were the most susceptible to finding themselves underwater as home values have fallen, eroding any equity the buyers had built up. Some new buyers also might find themselves underwater if they financed home purchases with little or no down payment.
Perry, who works in the Navy as an operations specialist, decided to sell the home after going through a divorce last year.
Selling for less than he owes on the mortgage requires lender approval, and, since listing the property in January, Perry has had two contracts fall through.
The 30-year-old has his fingers crossed that his most recent contract will get approved.
"I feel like it's just not going to happen," he said. "After losing two contracts, it's hard not to lose hope that it's going to sell."
Josh Brown, (757) 446-2318, josh.brown@pilotonline.com
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Somewhat even over all
Yes, my home is worth a lot less than I paid in 2007, however,I have to keep in mind that the home I had previously was purchased for $190K in 2003, and sold it in 2007 for $330K, and insane $140K profit. The home I purchased after in 2007 was $365K, now it's worth $280K, maybe even $250K, who knows anymore.So my current home is right now around a $85K to $115 loss. So I guess I'm techinically ahead of the game, but for my own mental state, I just like to think I'm even in case the value goes down more. I plan to stay there until it's paid off, or at least until it's worth what I owe.Yes,I am shackeled to it like many others. We got mortgage modification help from www.vbcdc.org in Virginia Beach, it's free.They may be able to help you.
Old news
Apparently the pilot cannot come up with anything new so the run this same article every few weeks to waste ink.
Whats the fuss Gus?
I don't get what all the fuss is about.....this is no different than getting a new car and the moment you drive it off the lot its worth less than what you owe on the note.......its called being upside down if you will. Same things apply on that new big screen TV you charge, its worth less a month later than what you paid. If you bought your house and expect to make a profit in 5 years you really are in for a rude awakening unless you're flipping houses for a living. Everyone that bought these houses knew they were up in price substantially compared to just a few years prior.....its part of the game.......life is a gamble that doesn't always pan out in your favor.
So it is all right with you
that the banks get bailed out with our money, but they refuse to write down the mortgages that they made huge profits on in fees and resell.
The banks took a risk and should have lost. The homeowner took a risk and did lose.
The number of underwater loans is what is helping to keep our recovery from moving forward. Owners cannot sell, move, get jobs in other cities or loosen debt. Banks keep making money and survived because we bailed them out.
That is a good thing?
The banks can take the proverbial "haircut", write down the loans and help get America back on its feet.
And you blame the homeowners. Wake up and smell the coffee.
America got screwed by the banks.
bankers
Had a conversation with a friend - local bank president - just after the bailout $$$ was dispensed.
On nothing more than my saying "how about this bailout situation?"
he became surprisingly defensive, very uncharacteristic in his response--
"they made us take the money, we don't need it and will pay it back ASAP!!".
Knowing him as a good and moral individual, I've often wondered if he was having fits of conscience.
In any case, am sorry for those caught in the decline.
Especially those taking the double hit of being upside down and laid off,
soon to be a foreclosure case.
It takes two to
It takes two to tango.
Homeowners all thought they were going to get rich on the sole idea that they took out a loan on a house.
Banks didn't care, they passed the loans off.
The only ones who really got screwed are the wise ones on the sidelines that easily observed the entire housing mania was nothing but a lie.
The proper correction is for home prices to fall hard. The banks are probably mostly insolvent. The banks need to dump the inventory on the market. Property prices don't belong higher, it doesn't match incomes.
The gov't also helps keep prices of housing high with programs that claim they are to keep housing prices affordable. Kind of odd but thats the way it works.
Nope, it never was a fair
Nope, it never was a fair game.
We accept the fiat monetary system without question, and think nothing of the fact that the central bank can create money out of thin air and give it to banks at 0%, who can then lend it out leveraged by 10 times or more, completely protected from failure by the politicians who benefit from the easy money by buying votes with promises they never have to worry about being able to pay for.
And then we blame the poor slob who, like 99.9% of the rest of us, were under the false impression that housing prices could never fall.
It's the fiat monetary system that's the problem, not the unfortunate home buyer who bought at the wrong time and is now underwater.
What's with all the crying???
If you bought a home for $200,000 and it's now worth $150,000, you made a bad investment. So, pay it off within your scheduled terms and in the end it will be worth more than you paid for it. No-one guaranteed you a specific annual value gain in purchasing a home and the general citizenry is not responsible for your payments. Stop crying, get back to work, and pay your own debts. Maybe take a course in economics or finance.
So the banksters get bailed
So the banksters get bailed out by the taxpayers and enjoy record bonuses, but for the poor slobs who bought houses at the high it's just tough luck?
And that's okay with you?
Which banksters?
Remember that 71% of the Subprime loans were made by Fannie Mae, Freddie Mac, FHA and HUD. Those are government sponsored entities which are not regulated by the same agencies that regulate the private banking industry.
No amount of added regulations on the private banking industry would have had any effect on the majority of subprime loans.
The investment banks which were bailed out (and should have been left to fail) were mostly invested in derivatives based on GSE issued Mortgage Backed Securities.
So, in condemning the Banksters, remember the primary villains in this mess worked for the government through those quasi-private GSE's.