A drag on Illinois’ economy

Joliet (Ill.) Herald-News: Being underwater on the mortgage is a drag for homeowners and for our state’s economy.

The outsized loans can have a number of negative effects on these unfortunate borrowers, all of it adding up to them having less money to spend and less opportunity to meet their goals than they otherwise might.

Market data shows that Illinois has a higher percentage of underwater homeowners than most states.

According to a report released Thursday by RealtyTrac, a real-estate information company based in Irvine, Calif., Illinois has the third-highest percentage of homeowners whose properties are “deeply underwater,” behind only Nevada (38 percent) and Florida (34 percent).

Some might be tempted to blame these homeowners for making bad investments, and that is partly their responsibility.

However, let us not forget the wisdom that once prevailed about the relative safety of investing in homeownership, how people were encouraged to buy homes by people everywhere and how eager banks were to lend this money during the housing boom that ended in the middle of the last decade.