Housing Market: Over 10 Million Properties In U.S. Have “Underwater Mortgages” With “Shadow Inventory ” Of Foreclosures At 1.5 Million Homes

As of the summer of  2012, according to Forbes, “…there are still more than 10 million properties with underwater mortgages, and a shadow inventory of 1.5 million, or four months supply.  Negative equity will continue to take its toll on consumption, while the shadow inventory, worth about $246 billion according to CoreLogic, will constrict lending and probably affect banks’ earnings…”

Out of those 10 million mortgages that are underwater, about 3 million remain “severely underwater,” which means the initial loan-to-value ratio (LTV) is 125% or more (in other words, the value of the mortgage is at least 25% higher than that of the property).  While seriously delinquent mortgages (at least 60 days) have declined, the percentage of loans in foreclosure has remained stubbornly high, at about 10% of underwater mortgages.

According to CoreLogic, the shadow inventory stood at 1.5 million in April, which translates to 4 months of supply.  After having peaked at 2.1 million in 2010, the shadow inventory has declined, but still remains elevated; its total dollar volume is $246 billion.

Source:  http://www.forbes.com/sites/afontevecchia/2012/06/26/10-million-underwater-mortgages-and-shadow-inventory-worth-246b-mean-housing-trouble/


Do you know how to make money as a real estate investor in today's uncertain market?
For important information for every real estate investor-- go now to http://REmogul.Power-Income.com