[Editor's note: This graphic mixes a free-form Dorling cartogram with a bar chart. Both examine the same nominal geographic data but the bar chart shows "underwater" mortgages as a percent of all mortgages while the cartogram shows the same by total per state. Since most US state choropleth maps are simply visual lists, this graphic dispenses with the map entirely and examines the thematic data through two lenses to show two different results.]
At least one in five U.S. mortgage holders – or about 8.3 million households – owed more on their mortgages by the end of 2008 than their homes were worth, sometimes called “underwater.”
SOURCE: First American CoreLogic | The Washington Post – March 5, 2009
U.S. Launches Wide-Ranging Plan to Steady Housing Market
$75 Billion Plan Would Help Borrowers Avoid Foreclosure
Washington Post Staff Writers
Thursday, March 5, 2009; Page A01
The Obama administration yesterday sketched in the details of its most ambitious attempt to reduce foreclosures and stabilize the beleaguered housing market at the root of the economic meltdown.
The program has two key elements: a refinancing program for borrowers with little equity in their homes but current on their loans, and a $75 billion program to help reduce mortgage payments for struggling borrowers.
Several large lenders praised the program, including Bank of America and Wells Fargo. There were also converts among those outside the industry. “I was skeptical at first, but I think these guidelines are helpful in a lot of ways,” said John Taylor, president of the National Community Reinvestment Coalition, a nonprofit group that has been critical of industry efforts to modify mortgages.
Homeowners with loans as large as $729,750 could see their interest rates temporarily cut to as low as 2 percent under the program. The administration also said it will add new incentives to persuade lenders that hold second mortgages to give up their claims, further lowering homeowners’ debt obligations. While the Obama administration initially said it would focus on owner-occupied properties, Fannie Mae and Freddie Mac said they would refinance loans for some second homes and investment properties, too.
That the programs would apply to mortgages worth up to $729,750 throughout the country and not just in high-priced regions surprised some industry officials who praised the move. “It will allow us to help more borrowers, especially those who have been hit hardest by the current crisis,” said John A. Courson, chief executive of the Mortgage Bankers Association.