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Tuesday, June 7, 2011

Second-Mortgage Misery

Although I'm having trouble accessing the full article, the numbers quoted are shockingly large.  40% of homeowners are now underwater that have a second mortgage and that has huge implications for strategic defaults or in plan English homeowners walking away from their mortgages.
Almost 40% of homeowners who took out second mortgages—extracting cash from their residences to cover everything from vacations to medical bills—are underwater on their loans, more than twice the rate of owners who didn't take out such loans.
The finding, in a report to be released Tuesday by real-estate data firm CoreLogic Inc., illustrates the consequences of easy borrowing amid the housing boom's inflated prices. The report says 38% of borrowers who took cash out of their residences using home-equity loans are underwater, or owe more than their home is worth. By contrast, 18% of borrowers who don't have these ...
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