Foreclosures Help Lower the Number of Underwater Borrowers says CoreLogic

The number of of residential properties with underwater mortgages fell to 10.8 million or 22.2 percent of all properties in the third quarter, down from 11.0 million in the second quarter according to data released by CoreLogic.  The decrease is primarily due to foreclosures of severely negative equity properties rather than an increase in home values.

During the year the number of borrowers in negative equity has declined by over 500,000 borrowers. An additional 2.4 million borrowers had less than five percent equity in the third quarter. Together, negative equity and near-negative equity mortgages accounted for 27.5 percent of all residential properties with a mortgage nationwide.

According to CoreLogic, negative equity remains concentrated in five states: Nevada, which had the highest negative equity percentage with 67 percent of all of its mortgaged properties underwater, followed by Arizona (49 percent), Florida (46 percent), Michigan (38 percent) and California (32 percent).

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The largest declines in negative equity were concentrated in the hardest hit states. Alaska experienced the largest decline, falling 1.8 percentage points, followed by Nevada (-1.6), Arizona (-1.4), California (-1.2), and Florida (-0.9). Idaho and Alabama are the only states with noticeable increases, which is not a surprise given they are currently the two top states for home price depreciation.

“Negative equity is a primary factor holding back the housing market and broader economy. The good news is that negative equity is slowly declining, but the bad news is that price declines are accelerating, which may put a stop to or reverse the recent improvement in negative equity,” said Mark Fleming, chief economist with CoreLogic.

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For the full report, see here.

 

 

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  • Okay, when I first saw the headline my head began to hurt. Then I read the article and my head really began to hurt. This is a good thing? Well, yeah I guess foreclosures would reduce the number of underwater borrowers, because now they are no longer borrowers, they are homeless. (Okay, I know that many of them are in apartments and not really homeless, but work with me here. 🙂 This is a good thing, absolutely. Sure, now we get to support them with our taxes, but hey, this means that someone is doing a great job. The number of underwater homeonwers is declining.

    Okay, I guess I am the Cynic today.

    Frank J. Kautz, II
    Staff Attorney

    Community Service Network, Inc.
    52 Broadway
    Stoneham, MA 02180
    (781) 438-1977
    (781) 438-6037 fax
    FrankKautz@csninc.org –work
    Frank@Kautzlaw.com –private

    • Frank,

      I beg your pardon but I am The_Cynic everyday on this website. {LOL 😉 }

      It is all right to be cynical. The world can stand a few more with such good “dark humor.”

  • Okay, when I first saw the headline my head began to hurt. Then I read the article and my head really began to hurt. This is a good thing? Well, yeah I guess foreclosures would reduce the number of underwater borrowers, because now they are no longer borrowers, they are homeless. (Okay, I know that many of them are in apartments and not really homeless, but work with me here. 🙂 This is a good thing, absolutely. Sure, now we get to support them with our taxes, but hey, this means that someone is doing a great job. The number of underwater homeonwers is declining.

    Okay, I guess I am the Cynic today.

    Frank J. Kautz, II
    Staff Attorney

    Community Service Network, Inc.
    52 Broadway
    Stoneham, MA 02180
    (781) 438-1977
    (781) 438-6037 fax
    FrankKautz@csninc.org –work
    Frank@Kautzlaw.com –private

  • Oh, and as a co-worker just pointed out to me, euthanasia will help ease the overcrowding in our long term care facilities. Oh, even better, jail breaks ease prison population problems! Or long term pedophila problem solved, child turns 18!

    Yeah, I’m still cynical about this.

    Frank

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