Wednesday, November 9, 2011

Do YOU have "effective Negative Equity" ??

What is ENE ?? (effective negative equity)

 'effective' negative equity,
is  when  borrowers/homeowners  who have so little equity in their homes, they cannot afford to move.

Consider the following from mortgage
analyst Mark Hanson:

On US totals, if you figure average house
prices use conforming loan balances, then a repeat buyer has to
have roughly 10% down to buy in addition to the 6% Realtor fee to
sell. Thus, the effective negative equity target would be 85%.
You also have to factor in secondary financing, which most
measures leave out.  Based on that, over 50% of all mortgaged
households in the US are effectively underwater — unable to
sell for enough to pay a Realtor and put a down payment on a new
purchase without coming out of pocket.

Special thanks to:
 Chris McLaughlin, who is widely known as America’s top
Real Estate Attorney and Investment Consultant.