Upside Down

From the Pensacola Journal: It's upside down time in housing.

A single mom with a 2-month-old infant called the other day with a question.

She was confused and looking for some advice.

Seems the young woman, a Warrington resident, wanted a home equity loan to add on a bedroom, consolidate credit card debt and buy new furniture.

"Someone told me I couldn't get a home improvement loan because I was upside down," she said over the phone. "What does that mean?"

I tried to explain that her house is now worth less than what is currently owed on the mortgage.

"But I still don't understand," she said. "I put $20,000 down on my house when I bought it. I've been making my mortgage payments every month for the past three years. How could I have lost all that money?"

You mean to say that the worth of a house is based on what other people are willing to pay, and a function of the credit markets not what you were duped into paying?

SHOCKER!