Negative equity occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan. 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".
People (and companies) may also have negative equity, as reflected on their balance sheets.
Read more about Negative Equity: In An Asset, Negative Net Worth
Famous quotes containing the words negative and/or equity:
“The idealist’s programme of political or economic reform may be impracticable, absurd, demonstrably ridiculous; but it can never be successfully opposed merely by pointing out that this is the case. A negative opposition cannot be wholly effectual: there must be a competing idealism; something must be offered that is not only less objectionable but more desirable.”
—Charles Horton Cooley (1864–1929)
“If equity and human natural reason were allowed there would be no law, there would be no lawyers.”
—Christina Stead (1902–1983)