underwater mortgage

Greedy? Stubborn? Try, “Drowning in Debt”

When you see an overpriced home languishing on the market at the same price, seemingly forever, it’s tempting to think the home owner is greedy, stubborn — or both. The more sympathetic (and likely) explanation? The homeowner/would-be Seller is drowning in debt. Not Underwater . . . But Lapping at their Feet Specifically, the amount...
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Upside Down Homeowner? No, Upside Down Home

By now, most people know what an upside down home owner is:  someone who owes more on their mortgage(s) than their home is currently worth. Supposedly, Americans are (still) collectively underwater to the tune of $5 trillion. So, what’s an “upside down” house?  (my term) It’s a home where the finished square feet are disproportionately...
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Housing Market “No Man’s (er, Seller’s) Land”: Explaining the Dearth of Inventory

When Supply & Demand (Especially “Supply”) are Broken “The sale of a home actually represents two, discrete transactions.  To a Seller, it represents a lump-sum payoff; to a Buyer, it represents a series of monthly payments.” –Floyd Norris; The New York Times To explain the dearth of homes for sale nationally as well as locally...
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“Sunk Costs” and Underwater Homes

Homes That Can’t Be Bought or Sold “Sunk Cost“:  A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business may face, such as inventory costs or R&D expenses, because it has already happened. Sunk costs are independent of any event that may...
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Short Sale Denial, Short Sale Semantics

Potential Short Sale?  Not if it Sells for ≥ 10% Over Market If you have been in a cave (or simply aren’t up on the housing market), a “short sale” is when a homeowner owes more on their mortgage than the home is worth (called “being underwater”), and to sell, must get the bank to accept...
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Contract for Deed “Catch-22”

Housing Market’s “Brussel Sprouts” Edina Realty Regional Manager Terry McDonough gave a terrific talk at City Lakes yesterday about the advantages — and potential pitfalls — of using contracts for deed in today’s housing market. In an environment of zero percent interest rates (“ZIRP”) and lots of stealth home equity (something like 2/3 of those...
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