According to a report by First American CoreLogic, at least 7.5 million American homeowners are “underwater borrowers,” meaning they owe more on their mortgages than their homes are currently worth.
This is called negative equity, and the report shows an additional 2.1 million people are on the brink of falling into it. Their homes are worth less than 5% more than the mortgages they’re paying on them.
The report’s 7.5 million estimate is a conservative number. Some organizations, including Moody’s Economy.com, estimate that as many as 12 million borrowers may be underwater. As a result, real estate auctions are on the rise.
…Nevada is home to the highest number of underwater borrowers, with 48% of homeowners having negative equity. Michigan follows with 39 percent. New York is faring best at 4.4%.
While this report does not specifically refer to cities, it is our belief that Nashville falls towards the lower end of the spectrum due to the lack of a run up in the mid 2000’s. It also appears that Nashville does not have as big of a subprime mortgage mess as other, similar cities.
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