negative equity
Debt exceeds value
Negative equity is when an asset is worth less than the debt owed on it.
The term usually applies to real estate: a homeowner has negative equity when their mortgage balance exceeds what they could sell the house for.
This situation traps owners who want to move, since selling wouldn't cover what they owe.
After the housing crash, millions of homeowners found themselves underwater with negative equity.
Reversed in vertical orientation
- loan-to-valueDebt-to-collateral ratio
- underwaterBelow the surface
- foreclosureLender seizes mortgaged property
- refinanceObtain new loan terms
default · repossession · subprime · amortization · adjustable-rate · fixed-rate · principal · delinquency
Inability to pay debts
- bankruptcyLegal status when insolvent
- overleveragedExcessively burdened by debt
- indebtednessState of owing money
- liabilitiesAmounts owed to others
creditors · financial distress · default · arrears · collection · write-off · balance sheet · restructuring
Sudden property value decline
- price dropReduction in cost
- depreciationAsset value reduction over time
- devaluationLowering of currency worth
- real estate downturnDeclining property market conditions
market correction · property bubble · comparable sales · appraisal · home value · buyer's market · distressed sale · property ladder
Reduction in recorded value
- impairmentDiminished function or capacity
- shortfallFailure to reach quota
- erosionGradual wearing away
- diminutionReduction in size
capital loss · paper loss · decline · downturn · contraction · depletion · decrease · slump
upside-down
Reversed in vertical orientation
- loan-to-valueDebt-to-collateral ratio
- underwaterBelow the surface
- foreclosureLender seizes mortgaged property
refinance · default · repossession · subprime · amortization · adjustable-rate · fixed-rate · principal · delinquency · forbearance
insolvency
Inability to pay debts
- bankruptcyLegal status when insolvent
- overleveragedExcessively burdened by debt
- indebtednessState of owing money
liabilities · creditors · financial distress · default · arrears · collection · write-off · balance sheet · restructuring · debt trap
housing crash
Sudden property value decline
- price dropReduction in cost
- depreciationAsset value reduction over time
- devaluationLowering of currency worth
real estate downturn · market correction · property bubble · comparable sales · appraisal · home value · buyer's market · distressed sale · property ladder
write-down
Reduction in recorded value
- impairmentDiminished function or capacity
- shortfallFailure to reach quota
- erosionGradual wearing away
diminution · capital loss · paper loss · decline · downturn · contraction · depletion · decrease · slump · investment loss
- debtdebt, creditor, owe, debtor, lender
- mortgagesfixed-rate mortgage, mortgage broker, adjustable-rate mortgage, mortgage payment, mortgage insurance
- UK Propertyfreehold, leasehold, estate agent, council house, terraced house
- equitycommon stock, preferred stock, retained earnings, treasury stock, outstanding shares
- housing crisishousing bubble, housing crash, subprime mortgages, foreclosures, subprime loans
- foreclosureforeclosure auction, forced sale, foreclosure prevention, foreclosure notice, foreclosure sale
negative equityequity
Impartial treatment or ownership value
home equity · equity stake · above water · capital gain · appreciation
negative equitynet worth
Assets less debts
solvency · financial health · wealth · creditworthiness · in the black
negative, negatively, negate, negation, negating, negated, negativity, equity, equities