A recent study shows that 1 in 6 Americans now owe more on their mortgages than their properties are worth.

Zillow reports:

“As home values declined through 2008, more American homeowners have become underwater on their mortgages. At the end of the year, one in six (17.6 percent) of all homeowners had negative equity. This number rose from the end of the third quarter, when one in seven (14.3 percent) homeowners was underwater…

Home values in the United States fell for the eighth consecutive quarter, declining 11.6 percent during 2008 to a Zillow Home Value Index(1) of $192,119, according to the fourth quarter Zillow Real Estate Market Reports(2), which encompass 161 metropolitan areas.”

With numbers like that it’s no wonder that so many lenders are freezing and canceling home equity lines of credit. There simply isn’t enough money in borrowers’ homes to secure all existing second mortgages.

See Also:

Answers to Common HELOC Questions

What to Do if Your HELOC is Frozen

Tags | heloc crisis, heloc freeze, home equity