Study: Homeowners' Mortgages Lost Value

" scary stuff in the housing market a new report by -- dot com says that about one in five American homeowners have mortgages. They owe more on the house is worth in other words they are under water that is likely the biggest hurdle in the housing market right now with more on the trends. In real estate across the United States we -- welcome in Spencer -- off he'd be chief operating officer hello. Yellow dot com just what you thought Spencer things a look at little bit better. Your guys survey showing that many Americans just a whole bundle more than their house is worth how bad is it out there."

" Yet you know about twenty million Americans now -- more than their home is war which. You know sometimes people mistakenly say well -- outside my house anyway kind of what differences that may have Wright who cares what my house is worth well. It matters a lot whether you have equity in your home it affects your ability to refinance that affects your ability to draw out equity. -- and pay for personal consumption and that's really the problem here with such significant amounts of negative equity. -- does this number include."

" All homes in America including people who don't have mortgages or -- it only it only includes people who do you have mortgages."

" This number includes all homes in the entire country one in five if you look at only people who actually have a mortgage it's even more Graham it's about one and three so. There's a lot of negative equity out there in parts of the country you know home by about half of people in some parts the country's central California and other. Very hard hit parts of of America have even more significant amounts of negative equity it reminds -- kind of what got us into this mess it wasn't. So much declining home values as it was leverage the typical home in this country is only down about 20%. From the peak night but when you put nothing down and that you buy your home at the peak it doesn't take a very significant decline in home values all of a sudden an."

" Puts you in the red in terms of equity on that note and what percentage of the people who are under water did cash out -- five whether it was to redo the kitchen -- jets game."

" a lot I mean you know they were there were couple quarters there back in the peak in those six and a seven where the median down payment. In the country on initial purchase was around 5% and parts of the country the medium was zero. So you know there was very little equity put down."

" A couple of years ago paid search comin' back -- but I flew down what have landed LAX two weeks ago -- cab loses Sunday. Sort of chat with a cabbie told me as an actor of course right who is driving a -- on the weekends or raise money threat we talk about housing it's true story. He is raising money to buy a home okay been tentatively approved for an FHA backed mortgages put 4% down and his credit scores in the low six hundreds. 011 person's crisis is another person's opportunity I guess and there but the viewpoint days is that we we are not you know contrary to popular belief. We are not back to the you've got to have 40% days I mean he FHA if you back that loan all you need is three and a half percent. Right if he yeah."

" Interest rates are extremely low if you can get a -- such as such isn't that example. Interest rates are very low you can get a thirty year fixed rate on bonds dollar write up about 5% I mean that's a record low mortgage rates to that's great. That's definitely driving affordability the problem is this inventory glut -- about four million homes for sale right now nationwide. Is that those data thinks that there might be another twenty million or so homes basically waiting in the wings. To come online as soon as it. A home for home values start to appreciate about a third of Americans tell us that they would try to sell their home in the next twelve month that I barely -- scary. It very scary if they saw signs of improvement so if you're gonna have an L shape recovery because as soon as more demand comes on more supplies going to come on there's -- backlog of people who haven't been able to sell for the last two or three years but really want to sell. And they're going to try to list as soon as they can so. I don't expect any kind of bounce off the bottom I expect out of it a pretty long and sustained the kind of flat line before we start to see any real appreciation."

" Denver and essential issue with people who are underwater on their homes. That would put greater pressured to on home prices on the downside how many album will walk away. And just say take the keys."

" Yeah well that's that's anyone's guess and that's that's the 64000 dollar question I think. You know once you get kind of ten or 20% underwater if you can't -- five which you really can't when you have that much negative equity than it it may make sense created to turn over your home. As as sad as that may be and and that's clearly one of the things that's affecting. The housing market to 20% of all home sells nowadays. Are foreclosures and another 10% are short sells so about a third of all sales are are really truly distressed selling situations right now."

" Yeah I you know and that's scary stuff what you did on their -- that is home prices start to recover more people who were on the sidelines made and try to sell accelerated Victoria may be another downward leg -- off. Chief operating officer was yellow dot com Spencer thank you."