20% Still Underwater ~~~~ with no scuba gear!

According to real estate website Zillow.com, more than 20% of the nation's mortgage
borrowers owe more than their homes are worth. At 21.5% for the third quarter, it is a
small improvement over the previous quarter, when 23.3% of loans were underwater, and
in any event most of the improvement comes because so many people lost their homes
to foreclosure. Negative equity is a hotly watched statistic because it is a prime predictor
of foreclosure -- second only to loss of income. In some markets, residents were helped
by improving home prices. As prices rise, it narrows the gap between what home owners
owe and what they could sell for. As a result, hard-hit metro areas such as Las Vegas
continued to lead the nation, with 73.9% Reno around 61.9% and Carson City not far
behind with 58% .
Any sudden changing to make it easy to refinance, either through principal forgiveness or
lowering lending standards for Fannie and Freddie, would cause chaos in the mortgage-
backed securities market. The Fed, with a massive MBS position, would be a big loser.
So would be Fannie and Freddie. And that ultimately means the American taxpayer.
See you at the top because we will help you get there!