Result In Negative Equity. Negative equity is colloquially referred to as being underwater Negative equity often results with the bursting of a housing bubble a recession or a depressionanything that causes real estate. This negative or positive amount of retained earnings is reported as a separate line within stockholders equity.
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The Hong Kong Monetary Authority announced today the results of its survey on residential mortgage loans RMLs in negative equity at end-December 2020. The estimated number of RMLs in negative equity decreased to 185 cases at end-December 2020 from 199 cases at end-September 2020. Negative equity occurs when the value of a borrowed asset falls below the amount of the loanmortgage taken in lieu of the asset.
Negative equity most of the time means that a companys liabilities are so high that in theory shareholders owe money to their lenders.
When the result is negative then there is said to be no value left in the company. A clear example of this happens when the real estate market crashes and the owner of the house owes more than what the house is worth. The Hong Kong Monetary Authority announced today the results of its survey on residential mortgage loans RMLs in negative equity at end-December 2020. In the United States assets particularly real estate whose loans are mortgages with negative equity are often referred to as being underwater and loans and borrowers with negative equity are said to be upside down.
