by John Darer CLU ChFC MSSC RSP
The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on August 5, 2009.
Parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.
In its coverage of 100 U.S. metropolitan areas in June 2009, Deutsche Bank forecast that home prices would fall 14 percent through the first quarter of 2011, for a total drop of 41.7 percent. While the sub prime mortgage mess has been credited with being a catalyst to the current financial crisis, Deutsche projects the next phase of the housing decline will have a far greater impact on prime borrowers.
How will this affect the financial institutions holding their loans?
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