Jim Sinclair’s Commentary

23% of all US mortgage holders are underwater as the sale value of their property falls below the cost of settling their mortgage. That means Negative Equity.

Strategic Walk Away is becoming common.

Drain what? Are you kidding?

One in Four Borrowers Is Underwater
By RUTH SIMON and JAMES R. HAGERTY

The proportion of U.S. homeowners who owe more on their mortgages than the properties are worth has swelled to about 23%, threatening prospects for a sustained housing recovery.

Nearly 10.7 million households had negative equity in their homes in the third quarter, according to First American CoreLogic, a real-estate information company based in Santa Ana, Calif.

These so-called underwater mortgages pose a roadblock to a housing recovery because the properties are more likely to fall into bank foreclosure and get dumped into an already saturated market. Economists from J.P. Morgan Chase & Co. said Monday they didn’t expect U.S. home prices to hit bottom until early 2011, citing the prospect of oversupply.

Home prices have fallen so far that 5.3 million U.S. households are tied to mortgages that are at least 20% higher than their home’s value, the First American report said. More than 520,000 of these borrowers have received a notice of default, according to First American.

Most U.S. homeowners still have some equity, and nearly 24 million owner-occupied homes don’t have any mortgage, according to the Census Bureau.

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Jim Sinclair’s Commentary

Secret central bank loans and their covert purpose have no place in a public society.

When rule makers become rule breakers, claiming impunity as the ends justified the means, the rule of law no longer exists. The society is Totalitarian in the guise of Democracy.

The transition is completed. 

Mugged over a £25bn loan: Lloyds shareholders’ fury that they were kept in the dark about ailing HBOS
By Becky Barrow
Last updated at 11:40 PM on 25th November 2009

Lloyds shareholders were ‘mugged’ when the bank decided to buy HBOS without telling them it had been propped up by a secret £25billion lifeline, it was claimed yesterday.

The 800,000 Lloyds shareholders  -  who needed to approve the deal  -  were never told about the scale of the support that stricken HBOS had needed from the Bank of England.

Documents sent to shareholders did not make a single reference to the massive handout which was pumped into HBOS, owner of Halifax, last autumn.

The takeover deal, which they backed overwhelmingly, has proved disastrous.

Shareholders have seen their investment collapse from a share price of £3.30 last August to as low as 24p in March. Last night, shares were worth 94p.

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