Helping underwater homeowners move on

Cleveland; Las Vegas; Akron, Ohio; and Orlando had higher percentages of underwater homeowners in the second quarter of 2015. That lags behind the country as a whole, where the percentage was 19.6 percent, up from 19 percent in the second quarter of 2014.

About one in every seven New Jersey homeowners with mortgages, or 14.6 percent, are “seriously underwater” – owing much more on their mortgages than the home is worth, according to RealtyTrac, a California real-estate information company.

Earlier this week, the S&P/Case-Shiller Home Price Index noted that U.S. home prices continued to rise in May, though the gain fell short of expectations.

Lakeland led the major metro areas with 28.5 percent of mortgaged properties seriously underwater.

By comparison Lakeland, Fla., worst quarter was the third quarter of 2013 with 49.8 percent of properties being seriously underwater, according to RealtyTrac’s Second Quarter 2015 Housing Equity and Underwater Report.

In addition, underwater homeowners who struggle to pay their mortgages can’t simply solve their problems by selling the home.

California had the most cities with “equity rich” homeowners whose property is worth more than they owe.

Meanwhile, RealtyTrac noted that equity-rich mortgaged properties – those with at least 50% equity – rose to 10.9 million during the second quarter from 9.9 million a year earlier, though that figure has slipped since the end of 2014.

“Although the number of equity rich homeowners with a mortgage has increased by 1 million compared to a year ago, that number dropped by almost 300,000 between the end of 2014 and the middle of 2015”, Blomquist added.

For Orlando-area houses in some stage of foreclosure, 28 percent actually had some equity last quarter but more than half of them were seriously underwater – far above the national rate of 34 percent.

But for the same period, the percentage of homeowners who had amassed significant equity jumped to 25.4 percent in Collier County, up 23 percent over the year. “Usually a decline of this magnitude would suggest an uptick in the number of homes for sale, but unfortunately for Seattle, I don’t see this taking place”. Such buyers are “higher in Southwest Florida than they are in other markets”, he said.

Daren Blomquist, vice president of RealtyTrac, told KNPR’s State of Nevada that the reason so many people still owe more on their homes is that the prices were so inflated. “Across much of Ohio, housing demand is driving increased prices and lower days on the market, contributing to positive equity growth”.