Report: 12 percent of R.I. mortgages are ‘underwater’

By Michelle Brown
Reporter
Published: November 3, 2008

PROVIDENCE—About 12 percent of Rhode Island mortgage holders are “underwater” or have negative equity in their homes, according to report released by a California-based research group.

Officials at Rhode Island Housing said they’re not surprised by the finding.

“Since November of 2007, we’ve helped about 2,500 families who came into the help center who were struggling with mortgages that were beyond the price of their home value,“ said Joanne Ryan of Rhode Island Housing.

According to the report by First American CoreLogic, of the 207,000 mortgages in Rhode Island, 25,000 were higher than home value. Another 32,000 were classified as nearing negative equity.

Rhode Island says job losses coupled with the double-digit appreciation of home values in the early 2000s are behind the surge in the “underwater” mortgages.

“We became very attractive to subprime lenders who came into Rhode Island and started offering exotic mortgage programs,“ Ryan said. “Consumers taking opportunity of property appreciation got themselves in trouble.“

Many in trouble are turning to Rhode Island Housing which offers a variety of services for free.

“If they find themselves underwater, call the help center,“ Ryan said. “We have counselors on staff. We can help negotiate with their lender to force short sale, and help them get out of that mortgage.“