WASHINGTON - Just under half of all Arizona mortgages were "under water" in spring of this year, the second-highest percentage in the nation, according to a report from a private research firm.
CoreLogic said only Nevada, at 63 percent, had a higher rate of homes under water at the end of the first fiscal quarter of 2011, the most recent period for which it had a report.
An underwater mortgage is a home with negative equity -- when a person owes more on their mortgage than their home is worth.
Arizona homeowners who were under water averaged $60,000 in negative equity, according to the report, below the national average of $65,000. New York borrowers held the highest negative equity with an average of $120,000, but only 6.2 percent of mortgages in that state were under water.
Phoenix was the third-highest metro area in the nation, with 55 percent of its mortgages under water, according to CoreLogic, trailing Las Vegas and Stockton, Calif.
Bankers in Arizona said they sense that foreclosures are starting to slow down, as the market attempts to stabilize.
"We may be bottoming out here," said Paul Hickman, president of the Arizona Association of Bankers.
Large surpluses of housing are still keeping both housing and banking in gridlock. But experts don't believe the situation can get worse than it is right now.
Hickman said the banks are trying to avoid foreclosures, if only to avoid having to pay to maintain them -- a cost that can grow exponentially with about 100,000 foreclosed homes in the state.
"Foreclosures are flattening, they are not putting all that inventory on top of current inventory," Hickman said.
But state housing officials say that requests remain high from people seeking help with their mortgage payments.
"We have been seeing a lot of activity," said Shaun Rieve, spokesman for the Arizona Department of Housing.
Rieve said that the department got more than $267 million from a federal program that targeted states with the biggest losses in the sub-prime mortgage crisis of 2008. The Principal Reduction Program could allocate up to $50,000 toward a homeowner's principal if the lender matched that amount, up to 31 percent of the mortgage, according to the state housing department.
But Rieve said few big lenders came on board with matching funds. He said Bank of America was one of the few to come on board, while the state "can't get Chase (Bank) or Fannie (Mae) and Freddie (Mac)" to sign on.
The department has since redirected $36 million to an unemployment assistance fund that pays up to $2,000 a month in mortgage to unemployed homeowners who meet other requirements. The new program has been far more successful, he said.
Lenders said they are also offering loan modification programs and financial counseling programs to assist borrowers with underwater mortgages.
Chase spokeswoman Mary Jane Rogers said the bank is opening more than 25 new homeownership centers nationally in 2011. The bank already has two centers in Arizona, one in Phoenix and one in Tempe.
She said borrowers can come into these locations six days a week to meet with a Chase adviser to work on alternatives to walking away from their homes.
"We do not want to own people's homes," Rogers said.
by Anthony DeWitt Cronkite News Service Jul. 25, 2011 06:45 PM
Almost half of mortgages in Arizona are 'underwater,' report says
Reuters: Business News
National Commercial Real Estate News From CoStar Group
Latest stock market news from Wall Street - CNNMoney.com
- ► 2019 (55)
- ► 2018 (76)
- ► 2017 (81)
- ► 2016 (145)
- ► 2015 (146)
- ► 2014 (102)
- ► 2013 (395)
- ► 2012 (392)
- Almost half of mortgages in Arizona are 'underwate...
- Study: Arizona among worst states for consumer cre...
- Real-estate expert sees disconnect in lending
- Phoenix-area homebuilders adjust to market
- Gilbert new-home construction on rise, leading Val...
- Demolition site in Phoenix scheduled for trustee's...
- Scottsdale-based Meritage home sales, profits plun...
- Dissecting the rival debt plans' key differences
- Home-price index finally lines up with local reali...
- U.S. debt default would harm nation, individuals
- Fannie Mae Downgrades Housing Outlook. Again
- Can Brian Moynihan fix America's biggest bank? - T...
- Surprise! The big bad bailout is paying off
- Phoenix-area homebuilders adjust to market
- Savings Bonds' shift to digital-only marks end of ...
- Gilbert considers large apartment complex near San...
- A boom in corp. profits, a bust in jobs, wages
- Scams, manipulation, fraud targeting elderly on th...
- ASU launching 2 programs to offer help in resolvin...
- $86 million land purchase would expand Scottsdale ...
- Old Rawhide site in Scottsdale might become new ap...
- UPDATE: Freeport-McMoRan 2Q Net Income Doubles As ...
- Luxury-home broker Danley opens his own firm
- Storytellers: For 30 years, Walt Danley quietly cl...
- Realtors' confidence levels shoot up, survey repor...
- Chandler's office vacancy rate drops sharply
- Hispanic organization loan brings CityScape hotel
- FTC paying nearly $108M to Countrywide borrowers
- Bipartisan debt-reducing plan targets mortgage ded...
- Mortgage 'robo-signing' goes on
- 2 Phoenix medical-office buildings sell for $32.75...
- Analysis: Banks in Arizona need cash
- Lenders must give details on credit denials
- Home building jumps 14.6% in June
- Most of Tempe condo project is acquired
- Group proposes to build beach club in Entertainmen...
- Expert: Commercial loan modifications possible
- US builders' outlook rises after 2011 low
- 7 tips for rebalancing your fund portfolio
- Citigroup Q2 Profit Rises 24%, Tops View - Update
- Down on the farm, investors see big potential
- Apartment community is sold to fund for $40 millio...
- Prescott bank to open as a Foothills branch
- JPMorgan investment banking gains
- Foreclosure delays could hold off housing rebound
- Phoenix-area leasing of offices up in 1st half of ...
- Developer ready to channel energy into completing ...
- 26 acres in south Chandler sells for $2 million
- azcentral.com blogs - Scottsdale Republic Editoria...
- Settlements, lower trading to hurt 2Q bank earning...
- Feds ease foreclosure rules for unemployed FHA bor...
- Part of Scottsdale Promenade purchased
- Phoenix-area foreclosures are down again
- Bankruptcy filings in Phoenix area fall again
- Tenants, Glendale officials retain high hopes for ...
- 'Strategic defaulters' tend to be affluent, savvy ...
- Weidner fattens property portfolio
- Jobless homeowners to get more leniency
- Dimon-Bernanke Skirmish Shows Bankers Losing - Bus...
- JPMorgan pays $211M to settle bid-rigging charges
- Phoenix area housing market gaining ground, new da...
- New IMF chief vows to empower developing nations
- New regulation governs short sales
- Q&A on eligibility for homeowner aid
- Downtown Phoenix parcel set for housing
- Construction spending falls, manufacturing recover...
- Musical nameplates
- Office leasing may soon revive
- ASU realty professor Jay Butler retires
- Viad buys resort for $16 million
- Treasury secretary may exit after debt talks
- Scottsdale council increases maximum building heig...
- Fed limits debit fees retailers pay
- Bank of America pays $8.5 billion investor settlem...
- Phoenix shopping center sold for $30 million
- Scottsdale office buildings sold for $60 million
- Despite bad economy, homebuilder has Valley's top-...
- Fulton Homes to exit Chapter 11
- Former home of McCains up for foreclosure auction
- French finance minister appointed to lead IMF
- ▼ July (80)