9.3 million homes still “deeply underwater”

While total foreclosure actions (notices of default, scheduled auctions and bank repossessions) were down 26% in 2013 according to Realty Trac; there were still 1.36 million properties in the foreclosure process during the year.

Not only that, but at the end of the year more than 9 million homes — almost one in five homes — owed at least 25% more on their mortgages than their homes were worth.  So it looks like there will be a lot more foreclosures in our future.

As we’ve said before in these pages, it would be better for everyone if, rather than foreclosing, banks reduced the mortgage to current market value and reset the monthly payments when they thought that would allow the current owners to stay in the home.   This is good for the homeowner and cheaper for the banks.   Foreclosure costs a lot, and produces no more than market value for the house anyway.

 

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