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Underwater: Options When Your Mortgage Is Upside Down by Chris Lauer

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I N T R O D U C T I O N

Underwater Homes and Upside-Down Mortgages

Mary in California

Mary owned a ranch and home in California for 30 of her 69 years until 2004, when she decided to buy a house to be closer to her children. Two years later, the bottom fell out of the California housing market. This catastrophe left her home worth less than half the loan that she is currently paying off with monthly payments.1

Today, some would say Mary's home is underwater; others would say her mortgage is upside down. Whatever it is called, the amount she owes on her mortgage loan is greater than the current value of her property.

In addition to the lack of value in her home, Mary is also running into problems with it. Although the house is under full warranty, ...

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