Tuesday, March 8, 2011

CoreLogic: 23% of Mortgage Borrowers Underwater

According to newly released data from CoreLogic, the number of hosueholds who owe more on their mortgages than their homes are worth rose in the fourth quarter.
[CoreLogic] today released negative equity data showing that 11.1 million, or 23.1 percent, of all residential properties with a mortgage were in negative equity at the end of the fourth quarter of 2010, up from 10.8 million, or 22.5 percent, in the third quarter. The small increase reflects the price declines that occurred during the fourth quarter and led to lower values.

There are an additional 2.4 million borrowers that had less than five percent equity. If this number is added to the underwater total, negative and near-negative equity mortgages accounted for 27.9% of all residential properties with a mortgage.

The continued prevalence of underwater mortgages will continue to put pressure on loan performance. In addition, this is a factor that prevents people from moving in order to take new jobs, slowing down employment growth and contributing to structural unemployment problems.

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