Though we are far from a full recovery, CoreLogic came out with new data showing 11.4 million, or 23.7 percent of all mortgages in the 1st quarter of 2012 compared to the 12.1 million, or 25.2 percent of all mortgages at the end of 2011. “We are encouraged by the positive trend of increasing housing prices and falling negative equity share in key states like Arizona, Nevada and Tennessee,” said Anand Nallathambi, president and CEO of CoreLogic. “Although it will still be a slow recovery for U.S. homeowners, we see this improvement as a stabilizing and positive development for the mortgage industry.”
CoreLogic a provider of information, analytics and business services, earlier this month came out with new data showing that 23.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2012. This is down from 25.2 percent, in the fourth quarter of 2011. An additional 2.3 million borrowers had less than 5 percent equity, referred to as near-negative equity, in the first quarter.
Negative equity, also referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both. The fall of the housing market in 2006, home prices fell a dramatic 32.6 percent nationwide. In most cases, the decline in the value of homes was so vast the amount of debt became worth more than home’s market value, hence “underwater”.
Out of the ten states the with highest percentage of mortgages with negative equity, nine have the greatest rate of decline in home value from the fourth quarter of 2006 to the fourth quarter of 2011. Out of those nine, seven had the largest housing price declines, some dropped as low as sixty percent at the time