OUCH: 1 in 5 Americans Owe More on Mortgage than Home is Worth … Underwater Mortgages


From Yahoo Finance, home values continue to decline in the first quarter of 2009. More than in 5 Mortgage_Home_UnderwaterAmericans or 21.9 percent of all American homeowners have a negative equity and find themselves underwater.

Home values in the United States extended their fall in the first quarter, with more than one in five homeowners now owing more on their mortgages than their homes are worth, real estate website Zillow.com said on Wednesday.

U.S. home values posted a year-over-year decline of 14.2 percent to a Zillow Home Value Index of $182,378, resulting in a total 21.8 percent drop since the market peaked in 2006, according to Zillow’s first-quarter Real Estate Market Reports, which encompass 161 metropolitan areas and cover the value changes in all homes, not just homes that have recently sold.

U.S. homes lost $704 billion in value during the first quarter and have depreciated $3.8 trillion in the past 12 months, according to analysis of the reports.

Declining home values left 21.9 percent of all American homeowners with negative equity by the end of the first quarter,Zillow said.

Posted May 6, 2009 by
Economy, mortgage | 34 comments

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  • Comments

    34 Responses to “OUCH: 1 in 5 Americans Owe More on Mortgage than Home is Worth … Underwater Mortgages”

    1. ANewGirl on May 6th, 2009 10:33 pm

      Ouch is right, so many Americans now in this position. Too depressing to read this entire post. Ugh


    2. rightknight on May 7th, 2009 1:48 am

      Can we trace the collapse to a Government
      pressured and enabled spate of “Fancy Financing”?
      Hey it’s only fair for everyone to own a place
      of their very own don’t ya know? With a shot
      of careful redi$$$tribution here and there the land
      will accrue back to it’s ‘rightful owners’ who’ve been
      doing with less….. until now!

      Another piece of the PIE if you please!

    3. Scott on May 7th, 2009 6:27 am

      Thank you Bill Clinton, Barney Frank and Chris Dodd!

    4. Tommy on May 7th, 2009 6:38 am

      Bush economics
      SM: Who allowed bogus mortgages thru Freddie Mac & Fannie Mae? Who pressured banks to provide mortgaes to people who could never qualify just because it was a nice thing to do?
      I thought Republicans were evil.

      You can thank Barny Frank & Dodd.

      There is a reason why one is supposed to qualify for a loan. Generally, so they can pay it back.

    5. SUPER DAVE on May 7th, 2009 7:03 am

      while Americans lose their homes, obama seems to think he needs 20,000 more government employees to oversee the purchase of arms ?
      can people not see the crime of this administration or they just don’t care ?

    6. Scott on May 7th, 2009 7:29 am

      Tommy – it is exactly that un-informed un-educated comment that makes America scary. Come up with something original as blaming Bush is passe and OLD! Do some research so you can learn WHO put these policies in place! You people who blame Bush are so hypocritical as I can bet a significant amount of tree hugging losers took full advantage of the housing boom and refinanced and pull money out so you can buy your Escalades and flat screen TVs. You people make me sick!

    7. Dolf on May 7th, 2009 7:47 am

      Super Dave, at least 20k ppl now can afford their home again.

      btw. the banks and lenders made fortunes on this.

      SM: who presured the banks to create those credit-swaps.

      SM: Nope try again. Take a good look at what the govt was doing in forcing lenders to loan to the unloanable. Then it became en vogue as if one did not, then they would lose out.

      This is what happens when one bundles loans.

      One does not have the right to own a home if they cannot afford it.

    8. Dolf on May 7th, 2009 9:00 am

      the lenders made a good profit out of it, esp. with those complicated calculations.

      also some ppl just don’t think about what they do.

      me and my wife bought a house, but we made sure that we could afford it, even if a child is born.
      I think its plain stupid to get over your head in debt

    9. Dolf on May 7th, 2009 9:02 am

      scott telling ppl that their hypocrite

      ah, needed the laugh

    10. SUPER DAVE on May 7th, 2009 9:08 am

      DOLF: did you just get served ?

      just in case you are out of the loop,did you know that the democratic code word for a republican is “taxpayer”?
      other parties carry the weight of the democrat non tax payers on their shoulders.

    11. SUPER DAVE on May 7th, 2009 9:14 am

      dolf: when you are talking 1 in 5 are in over their heads, 20k is a very small number. 20k out of millions is not even a drop in the bucket.
      i have electrical contractors coming in telling me that they are wiring these several million dollar homes for people and they don’t even have furniture in the house and mattresses on the floor.
      they are purchasing more home than they can afford and letting them get foreclosed. and who is suffering ? the “taxpayers” !

    12. Scott on May 7th, 2009 11:44 am

      Don’t pay attention to Dolf – he’s not an American so he can NOT begin to imagine what is going on over here.

      Who said because Obama is going to hire 20k people (whoopdie do) that those 20K people can afford their homes? That is about as dumb a statement that one can make.

      Who cares if you didn’t buy over your head? You want a cookie? Besides I’m sure you receive government assistance anyways!

      Ah, the Clinton government along with Barney Frank and Chris Dodd did the pressuring, along with ACORN who would follow bank employees homes, threatening them; protest INSIDE the bank and bothering other customers; break into bank offices, etc….

    13. Tommy on May 7th, 2009 1:38 pm

      Off Topic But who allowed a gay retard to judge the miss usa contest? Everyone knows who really won!Miss Cali did!No one knows who the fags picked over her!Carrie Rocks!

    14. HOPE on May 7th, 2009 2:59 pm


      To own a home is part of the ‘American’ dream that all of us try our hardest to attain. Despite the rule of capitalism that dictates there is a winner and a loser, when it comes to home ownership one should not be preyed upon by our financial institutions. I purchased a town house in Hawaii and was offered this type of financing, glad I turned it down. It had nothing to do with hand-outs, it had everything to do with selling homes with an eye on repossession. The loss of real estate values are not partial, they effect us all, just as the number of foreclosures effects the value of every home. It has nothing to do with an under-class that was shown favoritism, it has to do with simple supply and demand. And Dolf was right, they made a killing on these mortgages.

      In my opinion, we are our brother’s keepers. There, truly, are people who are retarded, disabled and mentally or emotionally disturbed who would be better off with a roof over their heads rather than being treated as undesirables as they push their carts about our city streets and sleep in the doorways of multi-million dollar buildings. It’s a disgrace to see the richest country in the world turn their backs on their poorest citizens who, by no fault of their own, have nothing. Is it socialism to care or is it love?

    15. St Stephen on May 7th, 2009 4:19 pm

      I understand the desire of the American family to own a home. I also understand that many, if not most, put their trust in the mortgage lender, much like a doctor, and have confidence that they know the numbers and are assured that they can afford their “American dream”.

      Foolish? You bet. But the fact remains they did not anticipate problems. They should have, like #8 Dolf and his wife did, but didn’t.

      If nothing else, it points to a failure of the educational system to actually teach effectively. That is not such a stretch to think and it goes a long way to endorsing some form of school voucher for institutions that actually concentrate on the education of their students.

      Therefore, I decline to place the blame on most of the home buyers(I do take a case by case, however)and point the finger at those who irresponsibly pushed the papers into the face of the trusting victims, so to speak.

      I pray that we do not have another generation of ignoramuses(or is it ignorami?) to have to protect.

      By the way, #14 Hope

      Caring for people who are retarded, disabled and mentally or emotionally disturbed is not socialism but charity, which is predicated upon the faith of the donor and not mandated except by their belief system.

      Remember the term “picking oneself up by the bootstraps”? That still applies today. One cannot sit at home expecting help. If a hand is reaching, another will reach out as well. After so many years, this is a time tested truism. It works.

    16. stephen on May 7th, 2009 4:27 pm

      Thanks GOP, DEREGULATION was such a great idea…for the rich

      Too bad the middle class didn’t realize whose side they were on years ago

    17. Michelle Smith on May 7th, 2009 9:55 pm

      Actually you should be blaming Barney Frank, Chris Dodd & Bill Clinton for the mortgage situation. Remember, “everyone deserves a home” so what if that can’t pay it back, we can get the hardworking taxpayers to foot the bill.

    18. HOPE on May 8th, 2009 1:00 am


      I guess it comes down to what you want your tax money spent on. I’m a retard that prays through the Christ to the only true God and I’d rather my money be spent on things that make life better for everyone rather than fighting wars to support oil companies and car manufacturers.

      Whether you want to admit it or not, we have hundreds of thousands of people without homes. What’s wrong with putting people to work to build affordable housing, and things that free us from being dependent on the oil companies. Invest in renewable energy instead of playing the lottery with drill in hand against OPEC? If we pumped some tax dollars in that direction, the terrorists couldn’t afford to terrorize us.

      All that money that we spend on keeping those shipping channels open could be better spent on a little R & R for a technology that has already been invented… electrical cars, solar energy, geo-thermal energy and hydro-thermal energy, as well… We are the OPEC of the world when it comes to renewable energy and we have the science to put it to work. Isn’t that what it’s all about… putting people to work? The President has lots of options and with him, I think it will have to start with the People.

    19. Dolf on May 8th, 2009 5:03 am


      just because you can’t imaging it, it doesn’t that others cant.

      Kinda figured it out when viewing your use of language…………

      maybe you should come out of your cave a bit more often and learn how the real world works

    20. Dolf on May 8th, 2009 5:05 am

      and don’t come complain to me about taxes.
      my goverment takes about 52%.
      SM: Well Dolf, we dont want to become a country like yours that thinks that your money is their money.


    21. Dolf on May 8th, 2009 5:09 am

      Dave, got served?

      Or are you talking about the wife/child part

      sometimes its a scaring thought to put a child on this earth (esp. when visiting this site, so many f-ing lunnies out there)

    22. Scott on May 8th, 2009 7:47 am

      HOPE – WOW… you seriously are a certified delusional nutjob…WOW just WOW!

      Yep…yada yada yada…the rich turn their backs on the poor….yada yada yada….it’s the government’s job to give poor people homes that they can not afford….yada yada yada….

      Laughable…quite laugable…

      You people do not care about the homeless. It’s the same tired mantra over and over again. I doubt you have ever lifted a finger to feed or doing anything remotely for the homeless. I have on several occassions, delivering X-mas baskets, cooking dinner at a homeless shelter, give out countless and countless clothes to goodwill and homeless shelters, food drives….etc…

      LOL..you live in Hawaii and yet you want to talk about the rich turning their backs…LOL…Hawaii only has possibly the one of the highest cost of living in the United States…. GET OFF YOUR SOAPBOX you hypocritical scumbag! Would let homeless people or mentally disabled people live with you? LOL! I mean you are all for giving everybody a home…give up yours! I didn’t think so….. You worked all your life to buy your town home in Hawaii and MILLIONS upon MILLIONS have built up what they have over years and years and yet it’s YOUR right, the government’s right to come in and take that away and give it someone else, because that basically what redistribution is….. REDISTRIBUTION in the housing market under Clinton with help from Frank and Dodd caused this recession.

      BLAH BLAH BLAH…lets hear some more phoney pipe dream lies about socialism.

      Not to mention who is going to pay for all this?

      If you think Obama’s $250K threshhold won’t come down you are even more far gone that I thought. The CBO has long said he can not pay for his budget by with his tax proposals on the rich. Where is going to get the rest of his money? From your pocket then you will be homeless!

      Socialism is a mechanism that time and time again does not work.

    23. Dolf on May 8th, 2009 8:06 am

      Red, I do not making a sacrifice. I still go on vacation twice a year (we’ve got 25 paid days a year)

      Going Dutch – How I Learned to Love the European Welfare State. – NYTimes.com

      Think its nicer to live in Holland then in the US.
      Holland might not be the best example for the Republicans to complain about socialism, think France suits that description better

    24. Dolf on May 8th, 2009 8:07 am

      them Frencies strike all the time

      imn Holland unions have been declining since the 80ties

    25. Dolf on May 8th, 2009 8:19 am

      btw. Holland invented capitalism.

    26. Scott on May 8th, 2009 8:51 am

      I highly doubt Holland is nicer to live then in the US. I’ve been to Holland and I’ve been to various parts of the US and Holland is a dump compared to parts of the US; granted not all parts…You see only what TV wants you to see, the bad inner cities and crime, etc…but nobody talks about the MAJORITY of the US and the beauty that it conveys. I live on the Cheapeake Bay on the east coast and it’s more beautiful than anything I ever saw in Holland, except some of the hookers in the Red Light District on my brief jaunt in Amsterdam…LOL! Kidding of course….

      The description is the model of socialism that DOES NOT work…all of it!

    27. yoyo muffintop on May 8th, 2009 9:51 am

      Scott – Come up with something original as blaming Clinton is passe and old.

      But let me guess, in your mind blaming a former republican president for something is “passe and old” (reference #6 above as well as numerous post prior), but blaming a former democratic president…new and fresh.
      Makes sense.

    28. MIss-Underestimated on May 8th, 2009 11:02 am

      Look at it this way. 4 out of 5 American homeowners will not be a financial strain on the tax payers of America. I bet those 4 out of 5 are fiscally responsible too.

    29. yoyo muffintop on May 8th, 2009 5:37 pm

      Seems that SM’s and others are attempting to create revisionist history.

      The accusation that the Democratic Party is solely to blame for the current housing crisis is just frivolous.

      The Bush administration took the lead, so to speak, on pushing risky mortgages.
      From the Bush Administration’s White House Press Release entitled, “Focusing on the Nation’s Priorities – Meeting America’s Housing Needs”:
      In 2002, the President issued America’s Homeownership Challenge to increase first-time minority homeowners by 5.5 million through 2010. The Federal Housing Administration (FHA) mortgage program is an important tool for reaching that goal. In 2006, 31 percent of those using FHA mortgages were minorities purchasing their first home. The 2008 Budget continues Administration efforts to modernize FHA by improving its ability to reach traditionally underserved homebuyers, such as low- and moderate-income families, individuals with blemished credit, and families who have little savings for a down payment.

      Read that last line and realize it’s silly to claim that the Democrats were responsible for pushing risky loans and relaxed underwriting when the Republican President, with the complicity of his party, demanded loans be extended to individuals with blemished credit or who could not afford down payments.

      SM’s and others would also like you to forget this – it was the Republican administration which directed Fannie Mae and Freddie Mac to more aggressively serve risky markets and threatened their charter if they did not do so.

      From Bush’s Georgia speech in 2002:
      One of the barriers to homeownership is the inability to make a downpayment. And if one of the goals is to increase homeownership, it makes sense to help people pay that downpayment.
      … And let me talk about some of the progress which we have made to date, as an example for others to follow. First of all, government sponsored corporations that help create our mortgage system — I introduced two of the leaders here today — they call those people Fannie May and Freddie Mac, as well as the federal home loan banks, will increase their commitment to minority markets by more than $440 billion. (Applause.) I want to thank Leland and Franklin for that commitment. It’s a commitment that conforms to their charters, as well, and also conforms to their hearts.
      This means they will purchase more loans made by banks after Americans, Hispanics and other minorities, which will encourage homeownership. Freddie Mac will launch 25 initiatives to eliminate homeownership barriers. Under one of these, consumers with poor credit will be able to get a mortgage with an interest rate that automatically goes down after a period of consistent payments.

      Now let’s take a look at down payments.
      The American Dream Downpayment Act of 2003 followed Bush’s above admonishment in 2002 that capital must be made available to low- and moderate-income families, individuals with blemished credit, and families who have little savings for a down payment:
      From White House Press Release “American Dream Downpayment Act of 2003 – Expanding Homeownership Opportunities for All: On December 16, 2003, President Bush signed into law the American Dream Downpayment Act of 2003, which will help approximately 40,000 families a year with their down payment and closing costs, and further strengthen America’s housing market. This legislation complements the President’s aggressive housing agenda announced in 2002 to dismantle the barriers to homeownership.

      THEN the Republican administration had HUD offer “zero down payment” mortgages, and risky 3, 5, and 7-year ARMs:
      BUSH ADMINISTRATION ANNOUNCES NEW HUD “ZERO DOWN PAYMENT” MORTGAGE Initiative Aimed at Removing Major Barrier to Homeownership (Las Vegas) – “As part of President Bush’s ongoing effort to help American families achieve the dream of homeownership, Federal Housing Commissioner John C. Weicher today announced that HUD is proposing to offer a “zero down payment” mortgage, the most significant initiative by the Federal Housing Administration in over a decade. This action would help remove the greatest barrier facing first-time homebuyers – the lack of funds for a down payment on a mortgage. Speaking at the National Association of Home Builders’ annual convention, Commissioner Weicher indicated that the proposal, part of HUD’s Fiscal Year 2005 budget request, would eliminate the statutory requirement of a minimum three percent down payment for FHA-insured single-family mortgages for first-time homebuyers.”

      John Weicher was a Bush appointee and the elimination of the requirement for a 3% downpayment for a HUD/FHA loan was part of Bush’s initiative.
      These goals were reiterated in the 2004 GOP platform:
      The most significant barrier to homeownership is the down payment. We support efforts to reduce that barrier, like the American Dream Downpayment Act and Zero Downpayment Mortgages.

      Futhermore, it was the Gramm Leach Bliley Act (a Republican Bill singed into law, in all fairness, by Democrat Bill Clinton) that allowed banks to deal in mortgage-backed securities. Without passage of the GLBA by a Republican-controlled Congress, the subprime mess couldn’t have happened.

      Bipartisan folks….but SM’s and others would like you to think otherwise. Problem is they just have no facts to back up their partisan claims.

    30. Katablog.com on May 8th, 2009 9:15 pm

      Hope: you and several others need to do some research. Clinton started the fancy financing. Bush and McCain warned about the house of cards being built in 2002 but Barney Frank, Chris Dodd and the silly lady black senator (whose name escapes me right now) held hearings and said to lay off Fannie and Freddie because they were doing a wonderful job.

      Next, what your house is worth on the market today should not in any way prevent you from making mortgage payments you agreed to pay. If you continue to live in the house it should be worth the same to your family as it was when you bought it. If you could make mortgage payments then, all should be okay.

      However, the problem is just what Red said: people bought more than they could pay for. Lenders were threatened that if they didn’t make XXX loans in certain areas, they would lose their lending ability. Fannie and Freddie started counting welfare payments as “income”. Yes, lenders made money but they made risky loans they would never have made without the guarantee from Freddie and Fannie and the pressure.

      People got greedy and bought houses they couldn’t afford, figuring they would increase in value and that they would sell before foreclosure and make a bundle. The balloon burst.

    31. yoyo muffintop on May 8th, 2009 10:39 pm

      #30 – The mind of a complete 100% partisan at work.
      To say Bush warned about the house of cards yet the facts show the complete opposite – and in fact show Bush built the house of cards and created the “fancy financing” – is blind partisanship at it’s finest.

      As far as John McCain goes, if you’d like the “facts” about Mr. McCain I’ll post them for you. But when the facts are given and ignored for obvious partisan reasons, I’ll let you figure it out yourself.

      Jane Q: The skyy is blue
      Katablog: Nope, it’s green
      Jane Q: Look up, it’s blue
      Katablog looks up: Nope, it’s green

      So blinded.

    32. HOPE on May 9th, 2009 12:41 am


      You’re right about a lot of things. But I want to make it perfectly clear that when you talk about people buying beyond their means, it wasn’t just first time buyers or the poor. It was middle and upper class people as well.

      The collapse of the housing market has nothing to do with hand-outs… those people were qualified. They just weren’t prepared for a huge drop in the market and the lay-offs that followed. If you can’t be patient with your fellow man, the average citizen who is a slave to this system, just like the rest of us, then what’s the point? Let the bombs come flying because, honestly, not to hurt your feelings in any way… people make mistakes. Especially, when they trust bankers and financial institutions. Where you and I differ in our understanding of economics is that IMO the balloon always bursts after a major conflict… especially, one that lasts nearly eight years and cost US, as the people, over 20 BILLION dollars a month. So, who’s at fault? The one that chased after the money to be able to buy a home or the one who chased after an enemy who is too broad and too massive to even be defined, but one who’s differences has more to do with ideology and religion than it does with politics?

      Is it not our right, as a nation, to want independence? A home with a white picket fence in which we can raise our families… or has it come to be so complicated that, EVEN, our right to pursue happiness is to come under attack?

      Hey, Sweetie, any single one of us could lose our jobs tomorrow… then where would we be? Hopefully, not on SM having to be criticized because you wanted the best that YOUR money could buy for your family.


      I pray that, more than anything, this newly elected government will bring us together, not tear us apart. We have enough finger-pointing to go around to pick apart 5 or 6 presidential administrations. But we haven’t had one that can heal an ailing nation for quite some time; and imo that’s what it’s going to take.

      Kudos to you, Katablog. I will always respect you, in spite of our differences.


    33. Dolf on May 11th, 2009 8:41 am

      @scott np. thats what most young ppl do.

      first coffeeshop, then hookers.
      well…if they don’t pass out in the coffeeshop :)

      but, yes would love to visit the States, esp. for the countryside.
      There is only 1 city on my list and thats NYC

    34. Scott on May 12th, 2009 8:08 am

      It all started with Clinton…pick out all the Bush stuff you want (typical liberal talking points), most of that was forced upon him to sign to get his WAR stuff passed…those are the FACTS…If you understood how bills are created then you would understand…we get it, your life only goes back 8 years…probably all that pee brain of yours can handle.

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