Word: homely
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Dates: during 2000-2009
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...shortfall amount in question was $100,000, the walk-away responses accelerated at a faster rate. Some 7% of people said they would intentionally default when a $100,000 shortfall represented less than 10% of their house's value. Once that shortfall represented between 50% and 60% of the home's value, an entire 25% of respondents said they would walk away. The hesitation to intentionally default when the theoretical amount of negative equity was $50,000, even when representing the same percentage of a home's value, may relate to the high fixed costs that come with walking away...
What is not clear is how the survey results map onto what is actually happening in the U.S. today. It is true that in some areas of the country homes have lost half their value. It is also true, according to data aggregator First American CoreLogic, that there are five states where more than 30% of mortgage holders are underwater and another 15 states where at least 15% of homeowners are. However, this sort of data does not indicate how much homeowners are underwater - or their attitudes about future home prices. If a homeowner believes house prices will recover during...
Christopher Foote, a senior economist at the Federal Reserve Bank of Boston, who studied negative equity in Massachusetts during the late 1980s and early 1990s when home prices dropped 23%, argues that most walk-aways are likely driven by the combination of two things: both negative equity and an economic hardship, such as job loss. (See 10 ways your job will change...
Data from the new paper also point to the likelihood of mass walk-aways being a highly localized event. Sapienza and her colleagues plotted data on late mortgage payments and home-price declines and found very little relationship between the two when house prices in a metropolitan area had dropped less than 20% from their peak. However, once prices had fallen more than 20%, a disproportionate number of people wound up behind on their mortgage payments, even when the unemployment rate (a measure of means to pay) was held constant...
...billion individual decisions - including yours - every day: how much we drive, how much electricity we use, what we eat. Now a new website called My Emissions Exchange promises to bring the carbon market to your front yard. If you can drastically reduce the electricity you use in your home, the site will certify your personal emissions reductions and then broker those credits to companies looking to burnish their green reputations. "You're rewarded in two ways if you bring down your personal emissions," says Tom Reilly, the company's president. "You pay less in utility bills, and then you generate...