American homeowners are more conservative in their mortgage debt management -- and are hardly the credit junkies they are sometimes portrayed to be in the media -- according to new national consumer survey data.

Opinion Research Corp. interviewed a statistically-representative sample of 1,347 homeowners Sept. 22-26 and found that:

• Nearly nine out of ten of them have specific timelines and strategies to fully pay off their mortgages and become debt-free, or have already paid off all first and second lien debt.

• One out of four of all owners already are mortgage-free.

• Thirty-eight percent of all owners say they've paid off 50 percent or more of their original mortgage debt. Another 28 percent expect to be fully paid off within the coming 10 years.

• One out of every 25 owners say they've got no particular payoff plan or timeline in mind -- they've just never thought about it -- and one of every 16 expect to only pay of their mortgages when they sell their house.

The survey, commissioned by General Motors' online mortgage subsidiary, Ditech.com, also found that homeowners are not carrying mortgage debt burdens as high some critics suggest. For example, just one out of eight owners reported current mortgage balances above $150,000. (California owners were a notable exception here; one out of every three homeowners there are carrying home loan balances above $150,000.) Roughly one out of every five owners reported mortgage debt outstanding between $75,000 and $150,000. And another third said they have less than $75,000 yet to pay.

Though the Ditech/Opinion Research Corp study runs counter to some prevailing stereotypes of debt-laden homeowners who keep refinancing rather than paying off their homes, a top housing advocate says he's not surprised at the findings. Allen Fishbein, the Consumer Federation of America's housing and credit policy director, calls the Ditech survey results "consistent" with his group's own research.

"I think the notion that consumers think of their homes as a piggy bank is really oversold," said Fishbein last week. "People actually do everything they can to stay current on their loans and they do plan to pay them off. There are a lot more old-fashioned values out there in the marketplace than a lot of people assume."

Further indications of homeowner prudence about paying mortgage debts can be found in the most recent studies of late payments by the Mortgage Bankers Association of America. Only 2.15 percent of homeowners with prime mortgages paid even slightly late on their loans as of mid-2005, according to the association's second quarter delinquency survey -- a rate lower than it has been since 1998. Even homeowners with subprime credit histories have dramatically improved their on-time payments in the past several years. Whereas nearly one in 10 subprime homeowners paid late in 2001-2002, less than one in every 25 paid late as of mid-2005.

The bottom line here: Don't believe all those scare stories about debt-laden American homeowners blowing up as the housing boom winds down and interest rates rise. The statistical reality, as Allen Fishbein put it, is that homeowners "take their mortgage responsibilities very seriously." They will do whatever is necessary to hold onto their largest asset, come hell or high water.

Published: October 17, 2005

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.