The Real Deal Miami

Bailout won’t immediately help foreclosures

October 03, 2008 02:04PM

Even if Congress soon passes a $700 billion bailout of the financial industry, average homeowners won’t see much help as they fight foreclosure. Within the next 12 to 18 months, about 40 percent of U.S. homeowners with mortgages, or 20 million households, will owe more on their mortgages than their homes are worth, according to Deutsche Bank. The problem will be most severe in Florida, California, Nevada and Arizona, where housing prices soared and reckless lending practices were rampant during the housing boom. Only a small portion of problem loans can be saved, said Deutsche Bank analyst Karen Weaver.