Underwater Mortgages Affecting Home Values?

There's talk in mortgage news circles about an invisible factor that could affect home values. It's not the job market, mortgage rates, or strict lending requirements. It's too much debt, meaning that 25% or more of all homeowners with a mortgage have a balance higher than the current home value, based on a recent government report.

These homeowners with "underwater mortgages" may have less motivation to care for their properties and could affect surrounding home sales. Also, underwater owners are more likely to lose the property to foreclosure, which can impact normal home sales.

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