Here in Tucson, over 68,000 homes are “underwater”. No, the desert has not flooded. Unless you’re in New Orleans, being “underwater” means that you owe more on your mortgage than the current value of the property. Last week we learned that 25% of homeowners in the country owe more than their homes are worth and in Tucson, over a third are underwater. Arizona is the second worst rate in the country behind Nevada at 48% largely because the number is 54% in Phoenix!! Now you know why banks do not consider offering home equity loans in our state and why Fannie Mae and Freddie Mac consider Arizona as a “severely declining market”.
In Ken Harney’s weekly real estate column, he writes about Brent T. White, a University of Arizona law professor who suggests that homeowners that are “under water” on their home loans, walk away!
Here’s the article: http.latimes.com/classified/realestate/news/la-fi-harney29-2009nov29,0,3801270.story://www
Josh Brodesky’s column in The Arizona Daily Star discusses White’s academic paper and the possible repercussions from walking away from mortgage. The article also gauges reactions from professionals and homeowners.
Here’s the article: AZ Starnet 11.29.09 Real Estate Article
As a mortgage originator, I cannot imagine advising a borrower to default on their mortgage. However, millions of Americans have few alternatives. It will take years for Arizona to recover from the foreclose crisis. On the other hand, this is a very desirable place to live and the housing affordability index in Arizona is at its best level in forty years thanks to low housing values and record low interest rates. If you want to get in on the market, call me! I’m David Wolsky with PHH Home Loans and can be reached at 520-275-2536! Ask me about the tax credit available for buying an owner-occupied home by June 30th, 2010.
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Tags: Foeclosure crisis, home values, Housing