OUR FLOURISHING ECONOMY  5:09 pm May 9, 2011

Nearly a Third of American Mortgages ‘Underwater’

by Ken Layne

Just walk away.The economic recovery continues to be a complete fiction, like the Harry Potter books but without all the fun sex magick. Unemployment is officially back to 9%, with real unemployment at 22%. Energy and food costs keep rising as jobless benefits run out and wages are stagnant for the lucky ducks who still earn a paycheck. And there’s a record number of people owing more on their houses than the houses are worth: “28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009.” Throw in all the other awful economic news from America and abroad, and you might wonder if this whole system of corrupt corporate welfare/warfare thing has, you know, collapsed forever.

Sure, Wall Street and the big banks and the death-robot manufacturers are “back to normal,” but the 80% of people in this country expected to keep this leaky battleship afloat by purchasing a bunch of unnecessary garbage seem to be “vulnerable” for some reason and aren’t doing their consumer duty, according to Ben Bernanke. So, ultimately, one day, the whole thing falls apart because of too many Poor Folk not buying flatscreens to lull them into deeper complacency.

CNBC reports:

The number of homeowners under water—or, those who owe more on the mortgage than their house is currently worth—amounted to 28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009. That was up from 27 percent in the fourth quarter of last year.

Foreclosures also rose, following the moratoriums that had been in place in late 2010. In March, one out of every 1,000 homes was in foreclosure.

Also, home values nationwide have taken the biggest tumble since 2008. Remember 2008? It’s still here, and getting worse even as the calendar says 2011. [CNBC via Cryptogon]

 

Hola wonkerados.

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{ 135 comments }

nounverb911 May 9, 2011 at 5:11 pm

It's all Donald Trump's fault.

SorosBot May 9, 2011 at 5:12 pm

I'll keep this post to cheer me up every time I have to pay the rent.

widestanceroman May 9, 2011 at 5:22 pm

Ahm rentun in yer nayberhood, lowerin' yer vall-yoo evree day.

V572..whatever May 9, 2011 at 5:43 pm

Going short in housing proved to be a genius move!

Jukesgrrl May 9, 2011 at 7:45 pm

The rent is too damn high! ®

BaldarTFlagass May 9, 2011 at 5:13 pm

Location, location, location.

nounverb911 May 9, 2011 at 5:14 pm

Greenwich CT is back down to it's 2005 prices. Though there is a shortage of houses under $2mil.

mourningnmerica May 9, 2011 at 5:23 pm

When the market gets worse, they'll refer to it as Greenwich Mean Time.

V572..whatever May 9, 2011 at 5:43 pm

O! the humanity!

Sophist [غني عن ذلك] May 9, 2011 at 5:30 pm

I'm about ready to locate my foot up some bankers ass.

dyedwool May 9, 2011 at 11:00 pm

Or, as The Donald Himself might say: Locution, locution, locution.

GunToting[Redacted] May 9, 2011 at 5:13 pm

Plugs fingers firmly in ears, sings "LaLaLaLaLa" loudly…

nounverb911 May 9, 2011 at 5:13 pm

How much does Trump owe on his casinos? Is he bankrupt again yet?

Troubledog May 9, 2011 at 5:13 pm

Remember, every abortion claims two kidneys that could be yours someday.

nounverb911 May 9, 2011 at 5:15 pm

And a heart that could be Cheney's.

mourningnmerica May 9, 2011 at 5:24 pm

No, no. Don't think that way. Those kidneys just compete with the one of mine I need to sell to pay for my daughter's wedding.

Troubledog May 9, 2011 at 5:27 pm

Cheer up! Once Sharia law is in full effect, you can just accuse her of being sinful and legally stone her to death. Don't give up before the miracle.

Bonzos_Bed_Time May 9, 2011 at 5:26 pm

I'm actually more concerned for my liver.

neiltheblaze May 9, 2011 at 5:15 pm

The ownership society is working out just as planned.

WriteyWriterton May 9, 2011 at 5:17 pm

"Pwnership Society," you mean.

Ducksworthy May 9, 2011 at 5:20 pm

If by that you mean the owners will end owning everything and soon. Yes.

BaldarTFlagass May 9, 2011 at 5:16 pm

I'm still ok, but if shit goes further south, I'll be thankful for my nice homeowner's insurance policy and the fact that my arsonist high school buddy is getting out of prison soon.

nounverb911 May 9, 2011 at 5:17 pm

Atlas Defaulted?

zhubajie May 9, 2011 at 6:46 pm

Atlas conned Hercules into assuming the burden, as I recall.

Sparky_McGruff May 9, 2011 at 5:17 pm

I think if they just make cocaine tax deductible, then it will allow the hedge fund managers to spend more money on call girls, which will move the money into the rest of the economy. It's super simple, dontcha think?

Dr_Zoidberg May 9, 2011 at 5:17 pm

And that's why I live in a van down by the river!

Sophist [غني عن ذلك] May 9, 2011 at 5:22 pm

You looking for a roommate?

Dr_Zoidberg May 9, 2011 at 5:46 pm

Soitenly. I'll need two month's supply of Hobo Beans as rent, in advance.

DaRooster May 9, 2011 at 5:32 pm

You own a GAS GUZZLER man… you are part of the problem.

Dr_Zoidberg May 9, 2011 at 5:46 pm

Hey, I never said the van moves…it is extremely stationary.

elviouslyqueer May 9, 2011 at 5:33 pm

In Tennessee, river lives by you!

ShaveTheWhales May 9, 2011 at 10:22 pm

Apparently, river shares your room.

GunToting[Redacted] May 9, 2011 at 5:41 pm

!Vivo en van, circa del rio!

bureaucrap May 9, 2011 at 5:17 pm

Our model for society should be the Strength and Valor that was the Roman empire (say, circa Nero). .001% rich, everyone else a slave. Good times…

the_problem_child May 9, 2011 at 5:18 pm

"The number of homeowners under water—or, those who owe more on the mortgage than their house is currently worth—amounted to 28.4 percent of single-family homeowners, representing a peak since Zillow began calculating the data in 2009."

Add in credit card bills, and I'd bet more than a third of households are under water. And that's not counting the flooded out ones.

whiterabid May 9, 2011 at 5:18 pm

If values are based on Zillow's numbers, the percentage of underwater homeowners must be 40%. I think it's Newt's fault.

vulpes82 May 9, 2011 at 5:18 pm

Ahhhhhhhhhhhhhhhhhhhhhhh. I was missing my fix of Dr. Layne's Patented American Economic Deathspiral Tonic ("Bringing Despair and Hoplessness to the Wonkette Readership Since 2008!").

Ducksworthy May 9, 2011 at 5:18 pm

Thanks for another uplifting post Ken.

WriteyWriterton May 9, 2011 at 5:19 pm

Well, is the USA #1 in underwater mortgages?

If so, USA!USA!USA!USA!USA!USA!USA!USA!USA!USA!USA!

emmelemm May 9, 2011 at 5:22 pm

'Zactly.

We're number one! We're number one! We're number one….

V572..whatever May 9, 2011 at 5:45 pm

American exceptionalism!

emmelemm May 9, 2011 at 5:19 pm

{le sigh} Yeah, according to the 2011 property tax valuation, my condo is now worth less than what I still owe on it. But hey, that just means my property tax bill went down. I still have a job, and the mortgage is current, so I try not to be in a tizzy about the "underwater" concept.

Great header picture, btw.

nounverb911 May 9, 2011 at 5:20 pm

I hear that are a lot of houses near the Missississippi River that are underwater too.

elviouslyqueer May 9, 2011 at 5:38 pm

You beat me to it. Even though I really shouldn't snark about this.

Rotundo_ May 9, 2011 at 5:20 pm

But we need to cut taxes on the wealthy people: A rising tide drowns all suckers? No, that isn't it. A floating deficit makes ships sink? In any case, if we just fork over more money to the rich people, maybe we can get jobs as bodyguards and chauffeurs? Dammit we just need to cut taxes1!!!111!!!!11!!!!!!11!!!!!!!! We will all have more munnies if we just cut taxes!!!11!!!!! Laffer curve don't fail me now!!!!11!!!!!

Oldskool_ May 9, 2011 at 5:20 pm

Amerka needs to have a Going Out Of Business Sale.

nounverb911 May 9, 2011 at 5:21 pm

Do they take Yuan?

poorgradstudent May 9, 2011 at 8:47 pm

Aren't we kind of already?

Although I guess it's more like our leaders are looting the mansion before it burns down.

jus_wonderin May 9, 2011 at 5:20 pm

"How I Survived the Bush Era, without actually Dying."

hagajim May 9, 2011 at 5:22 pm

We're just circling the toilet until the Rapture flushes us all…in 12 days now.

nounverb911 May 9, 2011 at 5:23 pm

What will you do if the world doesn't end?

jus_wonderin May 9, 2011 at 5:27 pm

The Macarena??

nounverb911 May 9, 2011 at 5:30 pm

With Al Gore?

horsedreamer_1 May 9, 2011 at 10:43 pm

That's every day of the week, for me.

zhubajie May 9, 2011 at 6:48 pm

Roll over and go back to sleep. Later, maybe stroll down to Metro and buy another fifth of Meyers rum.

Toomush_Infer May 9, 2011 at 8:07 pm

I'm spending my hobo inheritance on Mount Gaye….

zhubajie May 11, 2011 at 4:49 pm

Mt Gay rum is good, too.

Bonzos_Bed_Time May 9, 2011 at 5:28 pm

That soon already? I have not been paying attention to my rapture calendar.

Gopherit May 9, 2011 at 5:30 pm

Who are you kidding? Like anyone from wonkette will get raptured. We're stuck here……and if enough christards get raptured, I may grab me a better house from which to watch the apocalypse.

Dudleydidwrong May 9, 2011 at 10:37 pm

I've been driving around looking for a Ferrari or Lamborghini (or even a 'Vette or Mustang) with a "May 21" or "In the event of the rapture…" bumper sticker on it. Haven't found one yet but I still have 12 days to go.

BaldarTFlagass May 10, 2011 at 9:02 am

Best I've been able to find so far is a 1992 Chevy Cavalier. Paint is a bit oxidized and the headliner is sagging, and needs tires. The hunt continues.

mourningnmerica May 9, 2011 at 5:22 pm

You know who ELSE was upside down in his home?

nounverb911 May 9, 2011 at 5:25 pm

The Wicked Witch of the East?

widestanceroman May 9, 2011 at 5:28 pm

Bat Boy?

neiltheblaze May 9, 2011 at 5:29 pm

Houdini?

jus_wonderin May 9, 2011 at 5:30 pm

Fred Astaire?

GunToting[Redacted] May 9, 2011 at 5:42 pm

Lionel Ritchie?

horsedreamer_1 May 9, 2011 at 10:44 pm

But not — definitely not — Bob Uecker.

Worthly[♬♪♬♪♫♪♬]Skum May 9, 2011 at 6:14 pm

David Carradine?

doloras May 9, 2011 at 6:27 pm

Mussolini? No, that was a gas station.

zhubajie May 9, 2011 at 6:48 pm

Bush the Younger, I hope.

Schmannnity May 9, 2011 at 9:14 pm

Dracula? Blackula?

BaldarTFlagass May 9, 2011 at 5:22 pm

I'm having a yard sale in two weeks and you can buy my old 51" flatscreen for 250 bucks and do your part to save the economy. (well, it's a rear projection, but the screen is flat).

rambone May 9, 2011 at 5:23 pm

If you think home prices are low now, just wait till the Osama house hits the market and further increases the McMansion supply.

jus_wonderin May 9, 2011 at 5:32 pm

I have long wondered why we didn't let the Girl Scouts find him. Geez, come Cookie Time they can coax out even the hardest cold heart.

comptoneffect May 9, 2011 at 9:17 pm

They thought about it but they couldn’t find Navy SEAL-sized Girl Scout uniforms.

Sophist [غني عن ذلك] May 9, 2011 at 5:24 pm

Hey, remember when all those nice financial advice people were telling us how our house was our best investment and advising to take out the biggest mortgage we could get to buy the biggest house we possibly could (and even suggesting we lie about our income to get an even bigger one, because what could go wrong?), because prices were going to keep going up, forever, and we were all going to be millionaires with robot butlers, on the moon? I'm sure they all got fired or something, right?

WriteyWriterton May 9, 2011 at 5:35 pm

Got fired and went to prison, Sophist. Every last one of them. Happy ending! Me likey!

m_supercomputer May 9, 2011 at 5:52 pm

I think it's even worse than the snake oil salesman not being fired – I have a few friends who used to be mortgage brokers that actually got pushed out of their jobs for not approving enough obviously-shady loans. Wouldn't be surprised if this was more common that we'd think.

Rotundo_ May 9, 2011 at 8:08 pm

Kind of a mixed bag for 'em: The small fish got laid off when the music stopped, but the big guys pretty much just kept on making rediculous money on other schemes. Most of the worst cheerleaders are still on CNBC or FauxBiz peddling the latest snakeoil and pulling down a healthy chunk o' change for doing so. It does surprise me that anyone has any confidence investing anymore. Except for canned food, shotgun shells and high quality sleeping bags.

Schmannnity May 9, 2011 at 9:16 pm

Gotta stretch!

pinkocommi May 9, 2011 at 5:27 pm

It's a good thing I never could afford to buy a house in the first place. Not being in debt is the new "rich," according to our actually-and-grotesquely-rich overlords.

GeneralLerong May 9, 2011 at 5:30 pm

I see a resurgence in debtor's prisons looming on the horizon. We've already imprisoned the drug-dealing lower classes, now it's time to get to work incarcerating homeowners.

Turn those housing tracts into exclusive golf courses and resorts. Overlooked by towering prison blocks.

AJW@[redacted] May 9, 2011 at 5:35 pm

Also, sports arenas. Few things instill more community pride in teh poors than a sports team that they can never afford to see play live, but their property and income taxes support.

zhubajie May 9, 2011 at 6:51 pm

The debtors to walk on treadmills to power electric generators? Does that count as new, green, power?

HistoriCat May 9, 2011 at 7:24 pm

They can stay green all the way through the end.

MMMmmm … Soylent Green!

sati_demise May 9, 2011 at 7:58 pm

add in free prison labor to work on the greens and…sweet!

Not_So_Much May 9, 2011 at 5:32 pm

Hah! The foreclosure means I'm no longer under water bitches!!! wait, …what?

Gopherit May 9, 2011 at 5:36 pm

I've been wondering for a while why banks have had zero interest in renegotiating mortgages to help people stay in their homes and to keep the economy from being further sodomized……and then it hit me. These fuckers actually expect another bailout. They build up enough "toxic assets" they'll expect the fed and treasury to bring out the dumptrucks of cash again to save their bacon…….but regular people can go fuck themselves.

US federal government, servicing corporations since …. well…..forever.

SayItWithWookies May 9, 2011 at 5:36 pm

One day the bankers got together and decided it was time to repeal all those annoying regulations — because getting three times the value of every house they financed just wasn't enough.

Geminisunmars May 9, 2011 at 5:44 pm

Do not despair, Wonketters. On the upside the average CEO remuneration went up 24% just this last year alone! USA USA, etc.

DaRooster May 9, 2011 at 5:44 pm

Gotta love the banks. Keep sending me notices that I'm "pre-approved" for refinance… at a lower rate… apply… "We're sorry, we can't loan on a manufactured home…" But you are the same bank that holds the note now…
FUCK YOU YOU GREEDY FUCKS!

metamarcisf May 9, 2011 at 5:47 pm

Today's story on the Mississippi River flood notes that 100% of homeowners on certain parts of the delta are underwater. So the news just doesn't get any better.

V572..whatever May 9, 2011 at 5:49 pm

Hate to be the official balloon-puncturer today, but an increase from 27% to 28.4% is not exactly exponential. When people borrow most of the price of a car, they're "under water' the minute they drive off the lot, yet this is not seen as an economic catastrophe. You may owe more than the house is worth, but you still have a place to live. If you can afford the payment it doesn't matter that you didn't "make money" on your "real estate investment," any more than it matters that you don't "make money" on rent. Owning a house is consumption, not an investment. People who believe what real estate agents tell them are often fooled.

Now stockbrokers: those dudes never lie.

Fox n Fiends May 9, 2011 at 6:37 pm

how dare you inject reason and sense into our hyperbolic universe!! COMMIE!!

Troubledog May 9, 2011 at 8:14 pm

Go get em, tiger.

rawr

I am so hot for you right now.

V572..whatever May 9, 2011 at 8:32 pm

And a gracious upfist to you in response, sir or madam!

Pithaughn May 9, 2011 at 8:24 pm

Hmm. There are an awful lot of folks who are banking on real estate being an investment, because they were told since they had a doll house / toy fort that owning your home was certain to be safe. But…. once the decision was made to dismantle the manufacturing base, and allow wall street types to make bets were lose they break even and win they get fantastically rich, the saps who had purchased or refinanced in the last 5 years or so were fucked. Once they realize what has been pulled over on them, well the manufacture of guillotines will be rising.

ShaveTheWhales May 9, 2011 at 10:36 pm

There is one sorta significant way in which your home loan is different from your car loan — you can't drive your house to a better job market.

I think the 5% change in the under-the-sea number does, unfortunately, have some significance in that it provides yet more evidence that the residential real estate market has still not bottomed out.

WriteyWriterton May 9, 2011 at 11:01 pm

Reasonable, accurate, and appropriate. What's wrong w/ you today?

owhatever May 9, 2011 at 5:49 pm

Biggest drop since 2009 when Zillow started keeping the stats? That's not even a two-year database. Not to panic on this one, it's garbage in-garbage out.

BZ1 May 9, 2011 at 6:03 pm

There's a nice estate in Abbottabad, going cheap…

Beetagger May 9, 2011 at 6:09 pm

Dr. Paul gave Alan Greenspan a world-class wedgie in his column today.

snarkycomments May 9, 2011 at 10:58 pm

With notably rare exceptions, Alan Greenspan is a honored and respected economist who's prognostications are accurate and timely.

Hatrabbit May 9, 2011 at 6:12 pm

Foreclosures are rising! finally the numbers are heading up!! This recovery RAWKS!!!

Wait … what? that's bad?

*shit*

Hatrabbit May 9, 2011 at 6:15 pm

Love that pic. Nothing says 'American Dream' like a tipsy barn in the middle of a desert.

DashboardBuddha May 9, 2011 at 6:33 pm

I won't make up my mind until I see Trulia's numbers.

fuflans May 9, 2011 at 6:48 pm

we're like the weimer republic only instead of bauhaus and fritz lang we get baggers, scooters and flag pins.

BaldarTFlagass May 9, 2011 at 7:14 pm

And Lady Gaga!!!

Jukesgrrl May 9, 2011 at 7:47 pm

She's no Sally Bowles, that's for sure.

WriteyWriterton May 9, 2011 at 11:02 pm

We are, therefore, well and truly ruined.

Pres[ $ rm -r * ] May 10, 2011 at 12:03 am

And scooter-truck-nuts. Don't forget the scooter-truck-nuts. Our generation's cultural equivalent of the Threepenny Opera.

Is Sarah Palin Mackie Messer?

crybabyboehner May 9, 2011 at 6:50 pm

Once we invade Pakistan the economy will come roaring back!
http://www.youtube.com/watch?v=gTQCU2ndzzw

Come here a minute May 9, 2011 at 7:09 pm

At least we'll always have Riley.

emmelemm May 10, 2011 at 2:08 am

Shakes fist at the sky…. WHYYYYY???!!!

Troubledog May 9, 2011 at 7:24 pm

My balls at borrowing money are too big to fail.

JackObin May 9, 2011 at 7:46 pm

Walmart is the number one employer in god's country. That is the only statistic you need to know to realize this nation is fucked.

KenLayIsAlive May 9, 2011 at 9:54 pm

And Walmart does seem to be going down the tubes lately as well.

BaldarTFlagass May 10, 2011 at 9:03 am

My schadenfreude has a hardon.

Jukesgrrl May 9, 2011 at 7:48 pm

And we're not laughing — amirite?

Pithaughn May 9, 2011 at 8:14 pm

This is what a country looks and feels like right before some charismatic fascists take over, promising that they will restore us to our former glory.

poorgradstudent May 9, 2011 at 8:51 pm

Here's hoping the "charismatic fascists" that were in the making somehow got stillborn and we instead ended up with Sarah Palin, Michelle Bachman, and the Tea Party.

Mort_Sinclair May 9, 2011 at 8:53 pm

No, no, no. This is small potatoes. The most pressing problem in this nation is that I, as a public school teacher, am allowed to collectively bargain increases in my health care copays. When that ability is taken away from me, THEN all will be right with the world.

HobbesEvilTwin May 9, 2011 at 10:25 pm

28% of single family mortgaged homes being worth less than the fancy bankers pretended they were worth is clearly the fault of lazy Americans and in no way a reflection on teh bankers having poor math skillz.

user-of-owls May 9, 2011 at 10:32 pm

Well that's a fucking hilarious post, isn't it.

Dudleydidwrong May 9, 2011 at 10:44 pm

Yeah. Makes you feel all warm and fuzzy inside–just like chugging a quart of cold milk only to discover half-way through that the milk was spoiled. Now you know something even worse is going to happen.

HuddledMass May 9, 2011 at 11:05 pm

Ken is telling us the truth, Owls, and …. YOU CAN'T HANDLE THE TRUTH!

Hiding under the bed now.

VinnyThePooh May 9, 2011 at 11:07 pm

I blame all those lazy fuckin' people that bought an affordable house then quit their $60k/yr jobs so they can get on unemployment and welfare!

I earned my free Freedumb Skooter!

chascates May 9, 2011 at 11:14 pm

"What is the use of a house if you haven't got a tolerable planet to put it on?"
Henry David Thoreau (1817 – 1862)

"A man builds a fine house; and now he has a master, and a task for life; he is to furnish, watch, show it, and keep it in repair, the rest of his days."
Ralph Waldo Emerson (1803 – 1882),

Pres[ $ rm -r * ] May 10, 2011 at 12:02 am

Invisible handjob.

MiniMencken May 10, 2011 at 1:23 am

Call me when a single-family house in any city in the United States that a sane person would want to live in starts costing less than $1 million.

SonofSpermcube May 10, 2011 at 4:41 am

http://www.city-data.com/forum/attachments/real-e

Anyone else remember this chart?

You know, the one that was pretty much spot on and predicted something like this would happen?

snarkycomments May 10, 2011 at 7:15 am

I wasn't sure how far this meme had spread: http://crookedtimber.org/2011/03/30/with-notably-

KeepFnThatChicken May 10, 2011 at 9:44 am

Let's get back to that "bought a bunch of unnecessary garbage" part, for a moment.

Isn't it sad to know that — to get back where we were — we have to buy shit again?

Somehow, I think it's better for our soul if we stay broke.

mikeveselysr September 30, 2011 at 10:31 pm

how accurate are the numbers that zillow puts out?

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