Half of Prime Mortgages Could Go Upside Down

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Half of borrowers with prime loans -- or loans made to borrowers with good credit and income -- will likely end up underwater anyway, according to a recent report.

Already more than one-third of prime mortgage loan borrowers are underwater or owe more on their homes than they're worth and with home prices expected to drop by another 10 percent, half of prime borrowers will likely end up underwater, a Fitch Ratings report found. More than 12 percent of borrowers are seriously behind on their payments according to the report, putting them at risk of defaulting.

"Prime mortgage default rates will stay elevated as home prices fall further and unemployment remains high," Fitch Ratings Managing Director Grant Bailey said in a press release.The report indicates that the credit crisis and falling housing prices are taking their toll on homeowners. Compounding those factors, out-of-work homeowners are likely having trouble finding a job. U.S. employers added 103,000 jobs in September, which wasn't enough to push the unemployment rate down from 9.1 percent.

Lawmakers are looking for a way to save hundreds of thousands of Americans from their underwater mortgages and spur a recovery in the housing market. Officials said they hope to unveil a plan in the next few weeks that would allow between 600,000 and 1 million borrowers to refinance their loans and lower interest rates, Reuters reported.

For the full story, see The Huffington Post.

For more on foreclosure and related topics see these AOL Real Estateguides:
Stop Foreclosure Rescue Scammers Before They Scam You

Foreclosure Help: What a Housing Counselor Can Do

How to Buy Foreclosures


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High-End Homes at Lowered Prices
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Half of Prime Mortgages Could Go Upside Down

Location: Snowmass Village, Colo. 
Price: $29.5 million
Beds/Baths: 7/8
Sq. Ft.: 12,836

Commanding 200 acres of Colorado countryside, this regal hilltop mansion swallowed some of its pride recently by offering a whopping $6.5 million price cut. 

See the listing for more photos and details

Location: Sands Point, N.Y. 
Price: $29 million
Beds/Baths: 9/6
Sq. Ft.: N/A

This stately brick colonial saw its ask plummet by $8 million recently. Now you only need to fork over $29 million for the 19-acre estate. 

See some images of this stunner. 

Location: Manhattan Beach, Calif.
Price: $24.9 million
Beds/Baths: 3/2
Sq. Ft.: 3,224

Shave $5.1 million off this gem of prime real estate in Manhattan Beach. Guess those gorgeous coastline panoramas don't run as high as they used to. 

Check out the stunning views

Location: Tahoe City, Calif. 
Price: $21 million
Beds/Baths: 5/7
Sq. Ft.: 12,255

This verdant estate recently reduced its price by $3.9 million. The home offers 3.3 acres, five bedrooms, seven bathrooms, a six-car garage and much, much more.

See more photos on the property's listing to give you an idea of what else this mansion delivers.  

Pictured here is the home's great room, perfect for family gatherings or large-scale entertaining. 

See some of the other rooms in this mansion

Location: Malibu, Calif. 
Price: $19.975 million
Beds/Baths: 6/7
Sq. Ft.: 6,667

Surrounded by eight acres of lush gardens and flanked by stables, a red clay court and a polo field, this estate just reduced its ask by $3.525 million. 

Glimpse the many other highlights of this beauty

The interior features antique ash beams, walnut floors and French brick. 

Location: Montecito, Calif. 
Price: $19.5 million 
Beds/Baths: 7/11
Sq. Ft.: N/A

This Italian villa, built in 1924, is available for the first time in 30 years -- and for $9.5 million less than its original ask. The 7.39 acre estate offers coastal and valley panoramas. Features include a pool, guesthouse, tennis court, Japanese garden and three gated entrances. 

Check out these lavish amenities by viewing the listing

Exposed beams and glass doors, leading to a porch with coastal views, add luster to this ornate interior. 

Location: Corona Del Mar, Calif. 
Price: $17.995 million
Beds/Baths: 5/8
Sq. Ft.: 7,251

This soft contemporary presides majestically over coastal cliffs. Walls of glass give the panoramas full advantage while three stories of outdoor living go even further to celebrate the residence's stunning location. But as exceptional as this property is, the owner may have asked a little too much at first -- or more than just a little: The home is $10 million cheaper than originally listed. 

See what else this coastal mansion has to offer.

The home doesn't let you forget its heavenly surroundings. 

See other ways it reminds you. 

Location: Kihei, Hawaii
Price: $17 million
Beds/Baths: 2/2
Sq. Ft.: 2,337

The fact that $17 million brings you just two bedrooms in the case of this stunner speaks to how expensive Hawaii beachfront really is. And just think: Before the home's $5 million price cut, two bedrooms here cost significantly more. 

Take in the views by at the listing

Location: Teton Village, Wyo. 
Price: $16.5 million
Beds/Baths: 9/14
Sq. Ft.: 13,194

With ski-in ski-out access, this sprawling mansion is the perfect luxury ski cabin. Game and exercise rooms make it ideal for family reunions. Now, it's $2.45 million less than it used to be. 

Learn more by viewing the listing

Location: Paradise Valley, Ariz. 
Price: $15.995 million
Beds/Baths: 7/10
Sq. Ft.: 17,015

Counting the residence's guesthouses, this property offers 35,000 square feet of covered space. Throw in the 21-car garages, and you've got to wonder: Was the original owner playing sultan? If so, the act's up -- this home has been foreclosed on. Recently, its handler cut the price by $2 million. 

See some of the crazy amenities in this mega-mansion. 

The home boasts high-tech security and sound equipment along with a 13-seat mahogany theater, solar-heated pool and solar-electric generator. There are also two swimming pools, including the one pictured at left. 

But that's just the half of it. See some other stunning features of the estate

Location: Malibu, Calif. 
Price: $14.995 million
Beds/Baths: 5/6
Sq. Ft.: N/A

Recently cut by $3 million, this contemporary, sited on prime Malibu Colony beachfront, boasts an expansive deck with removable walls, and a rooftop deck and spa tub, in addition to other features. 

See the listing for more details. 

Location: Aspen, Colo. 
Price: $14.995 million
Beds/Baths: 5/7
Sq. Ft.: 7,930

Nestled in its mountainside perch, this contemporary presides over Aspen, one of the premier ski towns in America. And it's now on sale: The price was recently slashed by $2 million. 

See the listing for more details. 

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