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A mortgage is said to be “underwater” when the market value of the underlying property is less than the remaining balance of the loan.
After the collapse of the housing market, ACME Bank was left reeling from hundreds of foreclosures on underwater mortgages.
The expression “underwater” may be applied to any loan fulfilling the aforementioned condition. This situation is also referred to as negative equity. In the case of mortgages, an extreme scenario may occur if there is a market bubble in the housing market and thus properties tend to be overvalued in the first place. When the bubble bursts, many property values fall well below their respective mortgage balances, as was the case in the U.S. and elsewhere in 2008. If the borrower is then unable to pay off the mortgage, foreclosure of the loan and repossession of the property may follow.
O hypotéce se říká, že je „pod vodou“, když je tržní hodnota podkladového majetku nižší než zbývající hodnota dluhu.
Po kolapsu trhu s nemovitostmi byla ACME Bank rozrušena stovkami propadnutí hypoték „pod vodou“.
Výraz „pod vodou“ lze použít na jakoukoli půjčku, která splňuje výše uvedenou podmínku. Tato situace se také označuje jako záporný vlastní kapitál. V případě hypoték může dojít k extrémnímu scénáři pokud nastane tržní bublina na trhu s nemovitostmi a nemovitosti tak mohou být od začátku nadhodnocené. Když bublina praskne, ceny mnoha nemovitostí se propadnou daleko pod zbývající hodnotu příslušné hypotéky, což se stalo v USA i jinde v roce 2008. Pokud dlužník následně není schopen hypotéku splatit, může následovat propadnutí hypotéky a exekuce dané nemovitosti.
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English Editorial Services’ mission is to assist international businesses and organizations of all sizes to communicate clearly, correctly, and persuasively with their business partners and target audiences.
Simply subscribe to receive our Business Term of the Day at no charge to your inbox each business day, with explanation in English and Czech.
