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Negative Equity

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Negative Equity
A situation in which one owes more on a loan used to pay for an asset than that asset's current market value. For example, if one borrows $100,000 to buy a house and, for whatever reason, the value immediately drops to $60,000, the homeowner is said to have negative equity. Negative equity is most common after the burst of an asset bubble. One with negative equity is said to be upside down in the loan.


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s negative equity position made it economically wiser to let the property go back to the lender.
Byline: DEMELZA DE BURCA ONE third of Irish mortgage holders face negative equity by the end of next year, figures claimed yesterday.
There are three states that account for roughly half of all borrowers in a negative equity position.
 
 
 
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