Chicago among cities with largest number of underwater homeowners, studies show

More homeowners are trapped by underwater mortgages in the Chicago area than in almost any other major metropolitan area in the country, two new studies show.

One study, released Thursday by housing research data firm CoreLogic, found Chicago slightly better off than Las Vegas and Miami. But a separate study released Wednesday by real estate website Zillow places Chicago homeowners in the worst position in the nation, with a larger portion of homes underwater than in either Las Vegas or Miami.

When homeowners are underwater, they have unpleasant choices. Their homes are worth less than they owe their lender. So if they decide to sell, they won’t make enough on the sale to repay the lender. Somehow they have to come up with extra cash to cover their debt, or they have to negotiate with their lender to have the debt forgiven in a process known as a short sale. And they have trouble buying a new house because they don’t have leftover money for the next down payment…Please click here to read Gail MarksJarvis’ story in the Tribune.