The Tucson Real Estate Way Back Machine
Well, maybe not so far back.
Honey, I can't find the keys
Every now and then the paper has to use a statistic to get a sensational headline. With Tucson in the midst of an Arizona drought you don’ hear much about homes being underwater.
However, the occasional article will appear about how many Tucson home owners are “underwater”, meaning they owe more on their home than the home is worth.
Home Owner Moves Into Home Underwater
Well, here’s a news flash, many of those home owners moved in underwater. Huh?
Back the the days of “Fog a spoon, get a loan“ it wasn’t uncommon for a buyer, to have a first mortgage, and a second mortgage. The part that often wasn’t really well known, the closing cost were folded into the loan.
For the mathematically challenged (this includes me) I’ll make an easy example.
Purchase Price $100,000 First Mortgage $80,000 Second Mortgage $27,000 (closing costs folded into the second mortgage) Total Owed $107,000
The home owner owes: $107,000 on a home worth $100,000. Oh, My, Gosh they are underwater.
Is this a Homer Simpson Moment? Is it any wonder there are so many home owners underwater?
