New York According to Deutche bank half of all mortgages to be underwater by 2012.
The headline of this article poses the following questions,
•1. What is that underwater mean? We know that an iceberg is mostly underwater and can do great damage. Obviously that underwater doesn't make it worthless.
•2. If it is underwater whose problem is it the banks or the consumers.
Underwater mortgages means, that you owe more on the house then its value. In other words the collateral is not enough of a security to the bank, which leads me into the answer for the second question,
Whose problem is an underwater mortgage, and the answer is the banks /lenders. When a consumer buys a piece of property if it is for the long term which means 7-10 years time the consumer already profited. 1) Tax deduction on mortgage interest, depreciation on value regardless if it does in fact depreciate or not. 2) By owning property they hedged against inflation and the erosion of the dollar 3) appreciation and most of the time tax free.
The only who stands to lose in an underwater mortgage situation is the lender, because the lender has to factor in collateral and security for their money, and an underwater mortgage or a declining economy offers no security for them the recoup their money quickly. But don't worry for the bank they got other ways and techniques to stay in business most likely they will make it up in rates and upfront fees.
In summary my message is, don't let the headlines scare you, it is merely an estimate that lenders need to make for themselves and not yours the consumer. As long as your plan for real estate is long term which it should be, and you are working with a Certified Mortgage Planning Specialist who is capable of advising you on the most recent cutting edge financing techniques you're in good hand and continue to buy real estate because it will make you wealthy.
For a consultation you can contact
Joel Silberstein
Certified Mortgage Planning Specialist, CMP
www.mortgageplannerview.com
Scary!!! I hope it won't be this way. Let's hope.
Thank you for sharing this wonedrful posting with us.
Thanks for your comment Valeria,
Hope is the mother of action but action has to follow so lets do to something to get out of this mess.
by educating buyers and by referring them to the appropriate service professionals that Can consul advise and negotiate on their behalf.
Thanks again Valeria,
Joel Silberstein
www.mortgageplannerview.com