The Effect of Negative Equity on Current Loans

12 Sep

Nationwide, eighteen percent of mortgages are underwater.   Statistics also show that a home with negative equity is more likely to go into default.  For loans that had an LTV greater than 150 percent, 4.4 percent went from being current to delinquent, while for loans with an LTV of 110-120 percent, 2.2 percent became new problem loans.

The delinquency rate for July was 7.03 percent, a yearly drop of 11 percent and a 30 percent decline from the January 2010 peak.  This is a positive trend in an overall negative climate.

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