1 in 5 homes in Eugene/Springfield 'underwater'
SPRINGFIELD, Ore. -- It used to be that home ownership was an investment you could count on, but a new report indicates otherwise.
First American CoreLogic’s new study shows that across the USA almost one in three home mortgages are underwater.
Oregon is not the hardest hit by underwater morgages. Nearly half of all negative equity in the country comes from five states: Nevada, California, Arizona, Florida and Michigan.
"It means you owe more on your house than what you can likely sell it for,” Andy Clark, a home mortgage officer at McKenzie Funding in Springfield said.
It's also called negative equity or being upside down on your mortgage. Here in Eugene and Springfield, nearly one in five homes is underwater.
This can happen if you borrow too much money against your home, and then it’s value falls, or if you bought during the peak of the housing boom and now your home is not worth quite as much.
“Just the fact of being underwater is not a serious thing,” Clark said. He believes being underwater on your mortgage, is not necessarily something to worry about.
“You still have your mortgage payment, you still have your house, nothing really has changed,” Clark said.
Just as long as you stay put and keep paying your mortgage you should be fine, but if something were to happen, if a homeowner had to move or could not pay, they may face foreclosure.
Clark said the main change here is that home ownership may not be an investment anymore, but just a place to live.
“When people buy a home they think they can’t lose, that it’s going to go up in value,” Clark said, but this is not always the case.
He believes, like many others that the market is improving, but he also believes it is changing as well.
“Welcome to the brave new world of housing in the 2000s,” Clark said.
