Underwater Md. homeowners
Pick four mortgaged homeowners at random in Maryland, and chances are that one of them owes more on his or her loan than the home is worth. Twenty-three percent -- very close to one in four -- are in that "underwater" state, according to a new report from First American CoreLogic.
That's higher than all but seven other states. (We've been high up the list for a while, alas.)
Underwater is a lousy place to be. If you need a bigger place, a smaller place, a place in another state where your employer is transferring you, etc., you'll need to bring money to the table -- or become a landlord -- to move on. If you're trying to move because you can't afford your mortgage payments, escaping foreclosure involves an often tortuous process of trying to get your lender to approve a short sale.
If you're not planning on going anywhere and can afford your mortgage payments, then an underwater mortgage could be nothing more than an annoyance. But get too far upside down, and some homeowners will walk, economists note.
"Negative equity is a significant drag on both the housing market and on economic growth. It is driving foreclosures and decreasing mobility for millions of homeowners," Mark Fleming, chief economist with First American CoreLogic, said in a statement. "Since we expect home prices to slightly increase during 2010, negative equity will remain the dominant issue in the housing and mortgage markets for some time to come."
One bit of good-ish news: The underwater problem isn't quite as bad in the Baltimore area as it is statewide. Just under 17 percent of Baltimore metro area homeowners with mortgages are upside down.
The state that's worst off is Nevada, where First American CoreLogic estimates that a whopping 70 percent of borrowers owe more than their homes are worth. Where do you stand?