US housing market hit by ‘walkaways’
By Aline van Duyn
Published: February 22 2010 22:13 | Last updated: February 22 2010 22:13
“Negative equity is a big challenge. It contributes to higher
delinquency and redefault rates,” Seth Wheeler, senior adviser at
the US Treasury, told a conference this month. “We will continue
to study the reduction of principal where appropriate,” he adds,
though the form it would take has not yet been determined.
Many mortgage investors and housing
experts believe it has to be dealt with.
“The housing problems run very deep, but so
far policies have just kicked the can down
the road,” says Laurie Goodman, analyst at
Amherst Securities, a broker that
specialises in mortgage investments. “To get
an economic recovery you need to fix the
housing problem. And to fix the housing
problem, you need to fix the negative equity
problem.”
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