Chicago Mortgage Crisis: Nearly Half Of Borrowing Homeowners Are Underwater, Says New Report

from HuffPost:



Newly released statistics show a mortgage crisis that is only deepening in the nation's third-largest city, with staggering numbers of homeowners in dire straits.

Almost half of mortgages in the greater Chicago area are now "underwater," according to the study by Zillow. That means that homeowners owe more than the value of their homes, a product of plummeting housing prices.

The proportion of underwater mortgages in Chicago, 45.7 percent, is eighth-highest among the nation's 25 largest metropolitan areas, and pales in comparison to the devastating 68.4 percent of underwater mortgages in Phoenix, Arizona, the nation's highest among big cities.

But the speed with which underwater mortgages have grown in the area is much more disconcerting. Just last quarter, the figure was only 38.6 percent; a year ago, it was just under 32, reports Chicago Real Estate Daily. .............(more)

The complete piece is at: http://www.huffingtonpost.com/2011/05/10/chicago-mortgage-crisis-n_n_860068.html

The 'burbs are where many of these underwater homes are. We're getting close to the bottom, the scalpers are coming in soon.

...... but strangely, the bottom keeps dropping lower.

Not until one wants or needs to come out of the water, or can no longer keep afloat.

In fact, having an assessed value greater than the mortgage value can be negative -- as it was for us when it increased our deductible for an insurance claim. Of course, in today's market, an assessed value is not the same as what one could actually get in a sale, should a sale even be a possibility.

Still have a ways down to go. Many people made very silly decisions in 2004-2008. Many banks made insane (if not criminal) loans to people who had no business borrowing that much.

Result: Housing catastrophe. Chicago has thus far avoided the status of a California central valley, Las Vegas, or Miami on this count, but it's not sustainable. Empty condos are going to seed all over the North Side.

And there seemed to be tons of largely empty condo buildings, particularly in the South Loop area.