According to the company’s market data, just over 11.2 million, or 24 percent, of all homes in the United States with a mortgage were worth less than the outstanding loan balance at the end of the first quarter of 2010. That figure is down from 11.3 million at the end of last year.
An additional 2.3 million borrowers had less than five percent equity in their home, CoreLogic found. Together, negative equity and near-negative equity mortgages accounted for over 28 percent of all residential properties with a mortgage nationwide.
“The two most important triggers of default, negative equity and unemployment, have stabilized over the last six months,” said Mark Fleming, chief economist with CoreLogic. “As house prices grow again and borrowers pay down their mortgage debt negative equity levels will begin to diminish.”
Fleming says the typical underwater borrower is likely to regain their lost equity over the next five to seven years.
Based on CoreLogic’s market analysis, negative equity continues to be concentrated in five states. Nevada sits at the top of that list, with 70 percent of all of its mortgaged properties underwater, followed by Arizona (51 percent), Florida (48 percent), Michigan (39 percent), and California (34 percent).
The share of borrowers nationwide whose mortgage debt exceeds the property value by 25 percent or more fell slightly in Q1 to 10.4 percent, or 4.9 million borrowers. That’s down from 10.6 percent, or 5 million borrowers, during the previous three-month period. The aggregate dollar value of negative equity for these deeply underwater borrowers was $656 billion dollars, according to CoreLogic’s data.
The company found that 38 percent of borrowers with second liens or home equity lines of credit were underwater in Q1, compared to 19 percent of borrowers without a junior lien. CoreLogic also noted the foreclosure rate for borrowers with secondary liens was 4 percent, compared to 2 percent for those withou
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