News Flash! Ten Percent of All Homeowners Owe More Than They Own

22 Feb News Flash! Ten Percent of All Homeowners Owe More Than They Own

In 2006, approximately 5% of all homeowners in the United States owed more on their home than it was worth. ABC News is reporting that the statistics for 2007 show 10% of all homeowners owe more than their home is worth. This number has not been seen since the Great Depression of 1929 and has doubled in just one year. If you bought your home in the last two years, that percentage increases to 30%!

This affects 8 million homeowners in our country.

That’s MILLION folks. That means that eight million families would have to pay money out to their mortgage holder just to sell their home. No money to buy a new home, no money to pay for moving costs and ultimately no money for the lenders to pay to their investors.

Why is this important? The largest investors in the mortgage market are retirement funds or foreign interests. Can you imagine a scenario where an American family is forced out of their home, have no money to find substitute housing and then find out that their retirement funds is also broke? I can.

In 1929, the Great Depression was marked by tent cities made of people forced from their homes. If tent cities start form in in your town do not be surprised. Then you will know for sure that the recession (the one that we’re not having) is really a depression and it may be 10 years before life returns to normal.

“ConnecticutGene Melchionne is a bankruptcy lawyer covering the entire State of Connecticut. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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