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Thanks to economist Morgan Kelly's devastating Irish Times piece, the topic du jour in Europe is underwater mortgages in Ireland.

To get a more detailed grip on this issue, go read Negative Equity in the Irish Housing Market, a paper by economist David Duffy.

A few charts really highlight the problem: First the estimate for the percentage of mortgage-holders with underwater homes:

For what it's worth, in the US, the equivalent number is in the mid-20s, so the problem is worse in Ireland.

click to enlarge images

chart

Another worrisome thing for the Irish housing market is this, the peak years for no-down payment loans. By 2007, these numbers were already falling for the US, suggesting the Irish bust is still working through issues the US has dealt with a while ago:

chart

There's lots more interesting stuff in the paper, which you can download here.

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Source: Interesting Stats on Ireland's Brewing Underwater Housing Crisis