Contacts
 



Keyword Site Search







Fewer Underwater Mortgages in Third Quarter






Foreclosure releases had been trending up, averaging about 25,000 a month in 2008 and 33,000 in 2009. There has been a noticeable increase in 2010 with releases averaging 45,000 a month the last six months, which reflects the increased permanent party to another.
Courtesy of CoreLogic


CoreLogic reported that 10.8 million or 22.5 percent of all residential properties with mortgages had negative equity at the end of the third quarter compared to 11 million or 23 percent at the end of the second quarter. This is the third consecutive quarter in which negative equity declined.

The company, however, attributed the most recent decrease to foreclosures of underwater properties rather than on an increase in home values. The aggregate level of negative equity declined to $744 in the third quarter compared to $800 billion at the end of 2009.

“Negative equity is a primary factor holding back the housing market and broader economy,” said Mark Fleming, chief economist with CoreLogic. Third quarter data showed continued improvement in the number of underwater mortgages.  Fleming however warned that price declines are apparently accelerating which could put a stop to or reverse the recent positive trends in equity.

An additional 2.4 million properties or 5 percent of the total mortgages were termed near-negative because their owners had less than 5 percent equity.

Negative equity remains concentrated in five states.  In Nevada, which has led the nation in foreclosures for nearly two years, 67 percent of mortgaged properties were upside down while in Arizona and Florida, two other states that continue to be plagued with foreclosures, underwater properties accounted for 49 and 46 percent of all mortgages respectively.  In Michigan 38 percent of properties were in negative territory and in California 32 percent. 

Alaska, about which little is usually heard in such studies, had the largest improvement in negative equity with a drop of 1.8 percent.  The other states showing the most improvement were also the states that have been hardest hit; Nevada improved by 1.6 percent, Arizona's negative equity dropped 1.4 percent, California 1.2 percent and Florida 0.9 percent.

In contrast to states like Nevada and Arizona, seven states have negative equity in single digits; Oklahoma has the lowest negative equity at 6 percent followed by New York at 7 percent and Pennsylvania and North Dakota tied at 7.4 percent.

– Courtesy of Mortgage News Daily


Related Stories




December 6, 2019, 1:46 pm PDT

Website problems, report a bug.
Copyright © 2019 Landscape Communications Inc.
Privacy Policy