Steve,
Yes, if you owe more on the car or house, the car and house are still assets. The car loan or mortgage are separate entities.
If you own a house for $500k and have a mortgage of $550k. Does that mean your house is worth -$50,000? No, the house has a value separate from the mortgage.
You could still sell your house for $500k. So, in essence, the house and mortgage are 2 separate entities.
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