According to an article in the Dallas Morning News, more than 30 percent of Dallas-Fort Worth homeowners now owe more than their property is worth and may eventually face foreclosure.

The article said:

“Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock,” First American CoreLogic chief economist Mark Fleming said. “Until negative equity recedes and unemployment declines, mortgage risk will continue to be very elevated.”

Nationwide, nearly one-third of all homeowners (15 million homeowners) with mortgages now owe more on their homes than they are worth, causing many analysts to fear that another tsunami of foreclosures is just around the corner.  With unemployment rising and the debt levels of Americans strained to their limits, foreclosure is a very plausible outcome for many of those homeowners paying mortgages on homes with declining values.  Although all upside-down mortgages don’t end in foreclosure, a homeowner who owes more on his/her house than it’s worth may be less inclined to fight to avoid foreclosure.

For those homeowners who want to stop foreclosure, they may be able to get a mortgage modification or file bankruptcy.  But it’s important that the homeowner weigh carefully the pros and cons of keeping a home that is losing value. But even if a homeowner decides to surrender their home to the mortgage lender he/she may still benefit from bankruptcy which can help them discharge other debts and protect their other assets from seizure my the mortgage lender.