Upside Down Mortgage

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Upside Down Mortgage

A mortgage in which the amount that a property owner owes on the loan is more than that property'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 an upside down mortgage. Upside down mortgages are most common after the burst of an asset bubble.
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The nation's housing market is slowly improving, but many Americans continue to struggle with upside-down mortgages -- owing more on their homes than they are worth.
16, 2012 /PRNewswire/ -- Many homeowners are sick and tired of paying on their upside-down mortgages while their neighbors and fat cat bankers get bailed out by the Fed.
Cash-strapped homeowners are staying put in their homes or taking a loss on their upside-down mortgages and moving back in with their parents to raise their families.
Upside-down mortgages, home depreciation values and looming foreclosure is the stuff of "HGTV's $250,000 Challenge.
Additionally, it is believed that to the extent that this stimulates investments in home improvements, it will enhance home values and help close the gap on upside-down mortgages and shrinking home values that are a major cause of our current economic problems.
A lot of people have upside-down mortgages or very tight margins -- maybe their home is worth $400,000, and they owe $350,000," so the money they save on paying a commission to a realtor could make a big difference, Donnellan said.
And, upside-down mortgages continue to plague many homeowners as well.