The Waters Keep Rising.

Here is an interesting article from the New York Times, Rescues for Homeowners in Debt Weighed. Here are some interesting excerpts -

Prodded in part by some of the nation’s biggest banks, the Bush administration and Congress are considering costly new proposals for the government to rescue hundreds of thousands of homeowners whose mortgages are higher than the value of their houses.

Not since the Depression has a larger share of Americans owed more on their homes than they are worth. With the collapse of the housing boom, nearly 8.8 million homeowners, or 10.3 percent of the total, are underwater. That is more than double the percentage just a year ago, according to a new estimate of the damage by Moody’s Economy.com.

More than 10% of homeowners are drowning in debt - I wonder what the percentage is that is not yet aware...

Administration officials say they still oppose any taxpayer bailout for either people who borrowed more than they could afford or banks that made foolish loans during the height of the speculative bubble in housing.

I wonder how many this would be - and also the people who refinanced or HELOCed there way underwater. All those people who could originally afford their houses or bought before the bubble and were able to enjoy it. All those people who are now using the equity to pay off the house. From Wednesday's post -

During the boom, rapid price appreciation meant borrowers built up home equity quickly. That minimized defaults, since owners could draw from that equity to pay their bills - including their mortgages - through home equity loans.

All the people are using their houses to keep up their houses and lifestyles. While not all of these people are drowning yet those numbers will increase.

Another issue to consider in this is that people who are underwater on their house and will either have to pay out at closing or if they are lucky have a short-sale will be out of the housing market for some time.