Chicago among cities with largest share of underwater homeowners, studies show – Chicago Tribune : Loan Modification Key

Chicago among cities with largest share of underwater homeowners, studies show – Chicago Tribune

Chicago among cities with largest share of underwater homeowners, studies show – Chicago Tribune

More homeowners in the Chicago area are trapped in underwater mortgages than in almost any other major metropolitan area in the country, according to two new studies released this week.

One report, released Thursday by housing research data firm CoreLogic, found Chicago slightly better off than Las Vegas and Miami. But a separate study released Wednesday by real estate website Zillow places Chicago homeowners in the worst position in the nation, with a larger portion of homes underwater than in either Las Vegas or Miami.

Housing prices are climbing and home purchases are increasing, but almost 10 years since the housing crash began it's not getting easier to get a mortgage. In Chicago, it's especially difficult.

When homeowners are underwater, they have unpleasant choices. Their homes are worth less than they owe their lender. So if they decide to sell, they won't make enough on the sale to repay the lender. Somehow they have to come up with extra cash to cover their debt, or they have to negotiate with their lender to have the debt forgiven in a process known as a short sale. And they have trouble buying a new house because they don't have leftover money for the next down payment.

According to Zillow, which studied 35 major metropolitan areas, about 20.3 percent of Chicago area homeowners still have homes that aren't worth as much as they need to repay, an improvement over 23.7 percent a year ago. CoreLogic, which studied the 10 largest metropolitan areas, says 16.7 percent of Chicago-area homeowners are underwater. That's an improvement over 18.8 percent a year ago.

 

 

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