Millions of Americans still trapped in debt-logged homes ten years after crisis
EAST STROUDSBURG, Pa., 2018 (Reuters) - School bus driver Michael Payne was renting an apartment on the 30th floor of a New York City high-rise, where the landlords idea of fixing broken windows was to cover them with boards.
So when Payne and his wife Gail saw ads in the tabloids for brand-new houses in the Pennsylvania mountains for under $200,000, they saw an escape. The middle-aged couple took out a mortgage on a $168,000, four-bedroom home in a gated community with swimming pools, tennis courts and a clubhouse.
It was going for the American Dream, Payne, now 61, said recently as he sat in his living room. We felt rich.
Today the powder-blue split-level is worth less than half of what they paid for it 12 years ago at the peak of the nations housing bubble.
Located about 80 miles northwest of New York City in Monroe County, Pennsylvania, their home resides in one of the sickest real estate markets in the United States, according to a Reuters analysis of data provided by a leading realty tracking firm. More than one-quarter of homeowners in Monroe County are deeply underwater, meaning they still owe more to their lenders than their houses are worth.
The world has moved on from the global financial crisis. Hard-hit areas such as Las Vegas and the Rust Belt cities of Pittsburgh and Cleveland have seen their fortunes improve.
But the Paynes and about 5.1 million other U.S. homeowners are still living with the fallout from the real estate bust that triggered the epic downturn.
https://www.reuters.com/article/us-usa-housing-underwater-insight/millions-of-americans-still-trapped-in-debt-logged-homes-ten-years-after-crisis-idUSKCN1LU0EP?feedType=RSS&feedName=domesticNews
Nitram
(22,803 posts)SharonAnn
(13,776 posts)Example: buy a house for $200,000, std mortgage is $160,000. House value drops to $100,000. You can only get a sad mortgage for $80,000. Owner would have to pay additional $80,000 to pay off the first mortgage.