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[0:16] ..." Lloyd destroy -- our personal wealth went home prices drop we've seen the massive destruction on an home well. Housing well for a number of reasons the first one is the mortgage"...
[1:10] ..." you know what -- a home equity line. My home equity just shrunk. -- 50%. I would like to pass this long can you -- off little bit from my mortgage on the borders stays"...
[1:39] ..." Put down a minimum down payment. Perhaps at a at a higher interest rate or perhaps one of these adjustable rate mortgages those of the folks -- are feeling of the most right."...
[4:26] ..." point. In the near future. And you. Need to start looking into refinancing mortgages. If the mortgage is too burdensome and there's a number of approaches right now through. -- initiatives that congress and administration have an -- it. Theories and ways to renegotiate with the lenders are other ways autumn meet meet to find a new mortgage. But these are not easy things to do while lenders have become very spoke to in the mortgage market. But it -- they were checking into the possibility of refinancing. Well when things are turning --"...
[0:00]" We're talking with UMass Boston economics professor Christian Weller when we see -- this kind of a precipitous drop in one month. What does that mean and tangible terms for the average homeowner who doesn't really I guess intent to sell their home immediately what does that do to their personal --"
[0:16]" Lloyd destroy -- our personal wealth went home prices drop we've seen the massive destruction on an home well. Housing well for a number of reasons the first one is the mortgage people mortgages actually increased faster -- whole crisis in the last few years. That the number two to well then no wealth is declining very sharply because tightly leveraged homes homeowners. Or losing. Money because the price of their homes -- driving on now."
[0:45]" Explain a little bit more to me about what that means and in terms of the date today for folks who. Obviously this is the biggest investment that."
[0:54]" Right I mean you gotta remember -- you don't -- in most cases your entire home a lot of in the house is owned by the bank. But when the price. All -- fault you. Absorb the entire law does not like he can go to the bank until well you know what -- a home equity line. My home equity just shrunk. -- 50%. I would like to pass this long can you -- off little bit from my mortgage on the borders stays were it is in your home price. The declined for the entire house not just on the part that you all. Which means your home equity shrinks much faster. And in the whole price. Which means you have a lot less well."
[1:33]" And so I I would imagine that people that are sort of on the bubble folks that. Put down a minimum down payment. Perhaps at a at a higher interest rate or perhaps one of these adjustable rate mortgages those of the folks -- are feeling of the most right."
[1:50]" Tropical press' most dangerous for people who own very little of their old hold we have very little equity stake in -- home because what can happen is. The prospect large enough the drop in the -- prosperous large enough. That all but certain you all more on your -- And then houses were. -- that's Coulter mortgages underwater. Typically if you plan to be there for the next twenty years but not a problem. But if you plan on selling the house anytime soon. That does create a problem because ultimately you'll have to come up with the extra money because the wholesale doesn't cover the entire mortgage."
[2:25]" Do you think that there are a lot of people in that situation or is that really the exception to --"
[2:31]" For the past few years we've seen a growing number of people who had very little equity in their houses. Up for two reasons first of all a lot of homeowners get into our homes with very little equity to begin with some people would make it a negative equity meaning. They actually took out a mortgage from more than -- work. When they when they got the first mortgage. So that it was a trend for the last at least trip through -- to 2006 it was definitely the case to Stephanie. The other parties for many years people you mister Holmes Leckey PM even when they had an. We -- in their hold. But the -- paper tickets college tuition to buy and car. To pay for a living expenses to people train the equity in their homes that means that now went home prices all. Much easier team for -- for the home prices to fall below all the money that the old in the hold. And that ultimately makes it very difficult into -- to -- to recover all -- enough money to repay -- mortgages to -- and."
[3:32]" With the way that things are -- is just a situation that you think we'll get worse before it gets better."
[3:37]" What's been going getting worse for about two and a half years on a pink get all that much worse own were were beginning to see in some cases. Hit bottom in terms of old -- Armed but. Don't do that just means that the drops that we've seen prices Indian homes built. Becoming smaller than the used to be and so instead of -- dropping by 40% you're -- impresses -- only order house prices. The house built -- only to fall by 25 to 30%. That's certainly better than he used to be but it's certainly not good news yet."
[4:09]" What advice would you have for people that are concerned about this that are perhaps over leveraged or perhaps took out. And a number of loans against what their house was worth."
[4:20]" Boy you definitely want to start building up equity in your home if you think you need to sell a home at some point. In the near future. And you. Need to start looking into refinancing mortgages. If the mortgage is too burdensome and there's a number of approaches right now through. -- initiatives that congress and administration have an -- it. Theories and ways to renegotiate with the lenders are other ways autumn meet meet to find a new mortgage. But these are not easy things to do while lenders have become very spoke to in the mortgage market. But it -- they were checking into the possibility of refinancing. Well when things are turning --"
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