U.S. Cities With The Most Underwater Mortgages

The Most Underwater Mortgages

For individual homeowners, being “underwater” on a mortgage – when a home is worth less than outstanding debt, or has “negative equity” – is one of the worst positions to be in, short of foreclosure.

Zillow.com, a firm that compiles US real estate and mortgage information, has put together a list of the 163 largest metro areas that includes statistics on median home values, market changes and the proportion of homes with negative equity. Also included is data on short sales, which occur when real estate sells for less than the value of outstanding debt on the property.

Included in the data is the “Zillow Home Values Index,” which represents the median measure of home valuations. According to Zillow’s most recent report, the median US home price is $182,378, down 14.2% from a year earlier. Almost one in five - 21.9% - of US homes are underwater.

So, which metro areas have the highest proportion of homes underwater? Click ahead for the results.

By Paul Toscano
Posted 15 May 2009

American Express Will Slash 4,000 Jobs

By Hugh Son and Ari Levy
May 18 (Bloomberg) -- American Express Co., the largest U.S. credit-card company by purchases, will cut about 6 percent of its workforce as cardholders squeezed by rising unemployment fail to pay debts.

American Express will take a charge of $180 million to $250 million in the second quarter, mostly tied to severance and other costs from eliminating 4,000 positions, the New York-based company said today in a statement. Additional reductions will be made in marketing and travel costs and consulting services.

The cuts, in addition to 7,000 job eliminations announced in October, may save about $2 billion in expenses this year, the company said. American Express has had to set aside more reserves for failed loans as surging U.S. unemployment makes it harder for customers to pay debt. The jobless rate reached 8.9 percent in April, a 25-year high.

“Credit is a big issue and the spending volume on the cards is a concern as well,” said Jason Arnold, an analyst at RBC Capital Markets in San Francisco, who recommends selling American Express shares. “They’re taking the right steps in this environment.”

American Express rose $1.90, or 7.8 percent, to $26.13 at 4 p.m. on the New York Stock Exchange today, trimming its loss for the past year to 46 percent. The stock dropped 13 cents to $26 in extended trading after the announcement.
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Housing Bubble Sparks Buyer's Advantage

Housing Bubble Sparks Buyer's Advantage

In the early 2000's acquiring a home was a simple as buying a pair of shoes. A less than perfect credit score with no money down and no closing costs was just enough to secure a loan for a brand new home with up-to-date amenities. At the time, it seemed like the newest trend in home buying was a success, however, fluctuating interest rates and a plummeting economy tanked the housing market faster than the speed of light.

As the saying goes, one man's junk is another man's treasure, and in the case of today's housing market, it's true. If you're looking to purchase your first home, or have the liquid cash to buy up a few foreclosed properties, it can all be done.

Because home values and interest rates have fallen to a record low and inventory has spiked to an all time high, the potential buyer has the advantage. In many cases, home owners are desperately needing to sell their properties knowing they can't compete with today's low values, and as result, buyers can name their price. The only disadvantage is the difficulties of securing a loan. If you have stellar credit, it is still problematic to get that loan without proof of savings, a steady job that you've maintained for at least 18 months, and a down payment of at least 3.5 percent for a Federal Housing Loan (F.H.A.) and 5 percent through a major bank. If you have switched jobs and/or ran into some financial troubles that have been reported to the credit bureaus, don't even try. Spare yourself the time and rejection to secure a job get your credit fixed. Don't worry about time running out, as the current market is predicted to last for at least another 6 years.

If you are a first-time homebuyer, you are in luck because there is an $8,000 tax credit that was extended in February 2009 to all those who qualify for a loan. Another perk is a very low, fixed interest rate in addition to the banks footing the expense of closing costs and accepting down payments as low as 3.5 percent.

Foreclosures are a tricky business because of the hit or miss element. While you might score and find a home for half or less than what's it worth, three possibilities exist. First, you could very well find yourself a foreclosed property for a good price that's been destroyed by the previous owners so badly that the cost to repair the damages trumps what it's worth. Second, you could find a diamond in the rough and acquire a foreclosure with ease, but risk the chance of seeing no return because surrounding property values have fallen too low. Third, if you're trying to flip the foreclosure, the resale of the home could take longer than you have saved to maintain it. The best thing to do is plan to rent out the property or occupy it until it appraises to the desired return and sell.

If you're in the market to buy a home, it can be easily be done at the right time. If possible, start saving a little bit at time and continue to fix or build your credit so you "look good on paper" within the next few years.

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