November 27, 2010 (Jeff Alan)
It’s hard not to get caught up in all the negative news about the housing market and the mortgage loan business today. It seems like all we hear about is underwater home loans and foreclosures. You’d almost think that every American has negative equity or that no one can qualify for a home.
But the truth of the matter is there are still over 100 million households in America that collectively have nearly $7 trillion in equity. According to the latest statistics by the Federal Reserve, Americans still have a whopping $6.96 trillion of home equity remaining even after the Great Housing Crash of 2007-2010.
In fact, the statistics reveal that nearly 20 million homes have a net worth of over $350,000 in equity. And if the recent trend of homeowners paying off more of their debt continues, we can expect that number to continue to grow.
And is there anyone out there that can still qualify for a home? According to statistics available from Fair Isaac, the folks that created the FICO score, on average today’s consumers are paying their bills on time. Less than half of all consumers have ever been reported as 30 or more days late on a payment. Only 3 out of 10 have ever been 60 or more days overdue on any credit obligation. 77% of all consumers have never had a loan or account that was 90+ days overdue, and less than 20% have ever had a loan or account closed by the lender due to default.
And although these numbers are high by historic standards, consider the times we live in. When the dust has settled and the economy gets back to historic norms and the Great Recession becomes nothing more than a memory, hopefully we can learn from the lessons that got us where we are today and prosperity will come to all.
Tags: mortgage loan, underwater home loans, negative equity, home equity, federal reserve, net worth, homeowners, debt