80,150 Hampton Roads Homeowners "Underwater" on Mortgages

The residential real estate market continues its death spiral as members of Congress and the White House dither and do nothing to halt one of the biggest forces dragging the economy downward. The financial industry received billions of dollars in bailout funds and little or nothing has trickled down to distressed homeowners. The result has been plunging home values and more and more people faced with simply walking away from properties no worth far less than what is owed on them It's a national problem and even Hampton Roads which is somewhat cushioned by the large military presence in the region is not exempt from the pain. The Virginian Pilot has a story that looks at the local mess where an estimated 24% of homes are "upside down" and now worth less than the mortgages balances outstanding against them. Here are some highlights:
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Nearly one in four homes with a mortgage in Hampton Roads - 24 percent - is worth less than what is owed on the loan, according to a report released Tuesday. The number of local home-owners who were "underwater" on their loans rose slightly to 80,150 at the end of March, according to CoreLogic, a Santa Ana, Calif.-based company that tracks mortgages nationwide.
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The firm's quarterly report said 22,967 more mortgages in the region will be underwater if home prices decline 5 percent from current levels.
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Economists and real estate experts say that owing more on a home than it is worth is one of the most common precursors to foreclosure. For homeowners who aren't in jeopardy of falling behind on payments, being underwater means they are tied to their homes - unable to sell without paying their lender the difference or negotiating a short sale. That also impacts the local home sales market, said Vinod Agarwal, an economist at Old Dominion University.
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The proportion of homeowners in Virginia who owe more than their homes are worth was 23.1 percent in March, CoreLogic reported.
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Across the country, the number fell slightly to 10.9 million, down from 11.1 million at the end of 2010, the firm reported. That represents about 22.7 percent of all residential properties with a mortgage nationwide. The highest concentration of underwater loans was in Nevada at 63 percent.