Subprime meltdown creeps toward prime mortgage holders

It's no secret that subprime mortgage holders have been feeling the pressure this year. So far we have not heard too much news regarding regular mortgage holders, but a new report is showing that even the average mortgage holder is starting to feel the pain of a weak housing market.

For most of this year, the headlines have revolved around foreclosures involving high-risk subprime loans. We have seen reports of falling home prices, but so far prime mortgage holders have been cruising along feeling pretty safe from the mounting real estate concerns. What they had not counted on was falling home prices pushing their outstanding mortgages "underwater."

What exactly does it mean to have a mortgage go underwater? Simply put, it is the term used to describe a mortgage where the underlying property value is worth less than the property in question. What has led to this is the fact that on average, property values nationwide are running 5 1/2% lower than they were this time last year, and many markets across the nation have seen much larger declines in values.