From: LongIslandBankruptcyBlog.com
Almost 1 in 4 U.S. homeowners is drowning in mortgage debt. The Wall Street Journal recently reported that the percentage of homeowners who own more on their mortgage than their property is worth recently swelled to 23%, or just over 10.7 million households, according to First American CoreLogic.
Of that number, approximately 5.3 million households hold mortgages that are worth 20%+ than their home’s value. That number will rise in the coming months. The first wave of foreclosures has passed, but sub-prime mortgages involving balloon payments or adjustable rates will trigger another wave when consumers holding such rates fail to qualify for conventional loans.
Americans’ priorities have shifted. While in the past, making a mortgage loan was paramount, TransUnion recently reported that Americans now prioritize car payments and credit card payments above mortgage payments. Lisa Epstein recently reported that consumers recognize the need for a vehicle to get to and from work, while quoting Ezra Becker, Director of Consulting and Strategy for TransUnion, who concluded that “consumers recognize that their credit cards are their primary purchasing vehicles in this economy.” Many Americans attitudes toward home ownership has changed following the housing crisis over the past 2 years, and as a result many have become delinquent on their mortgage loans. For those homeowners who are drowning in mortgage debt and prefer not to go into foreclosure, there is the option of bankruptcy.
