New York borrowers have more equity than debt, giving the state the lowest loan-to-value in the nation, according to a new report. But the picture is much more bleak in several other states — including one where total mortgages exceed total property values by nearly a quarter.
Mortgage balances exceeded property values on 11.3 million U.S. properties during the fourth quarter, First American CoreLogic reported yesterday in a negative equity report. The number was up from 10.7 million in the third quarter and represented nearly one-quarter of all residential properties.
The figures were based on data from 47 million financed properties accounting for more than 85 percent of U.S. mortgages. Current values were based on the company’s automated valuation models.
First American said another 2.3 million mortgages were approaching a negative equity position as of the end of last year.
“The rise in negative equity is closely tied to increases in pre-foreclosure activity and is a major factor in changing homeowners’ default behavior,” the report said. “Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors.”
The report indicated that aggregate U.S. property values were $12.647 trillion, while mortgages against them amounted to $8.915 trillion. The U.S. LTV was unchanged from the third quarter at 70 percent.
Mortgage debt outstanding in Nevada of $131 billion exceeded property values of $107 billion by nearly a quarter, pushing the state’s loan-to-value to 123 percent in the fourth quarter. The Silver State’s LTV climbed from 114 percent in the third quarter.
Dragging down Nevada was Las Vegas, where the LTV was 133 percent.
A distant second was Arizona, where property values were $271 billion and mortgage debt outstanding was $257 billion, giving the state a 95 percent LTV — higher than 91 percent in the prior period. The Phoenix-Mesa-Glendale area drove the state’s poor standing with a 101 percent LTV.
Florida followed with $866 billion in property value and $790 billion in mortgage debt outstanding. Florida’s LTV rose to 91 percent from 87 percent. The worst areas in Florida included Orlando-Kissimmee-Sanford, where the LTV was 103 percent; Fort Lauderdale-Pompano Beach-Deerfield Beach, which had a 99 percent LTV; and Tampa-St. Petersburg-Clearwater, where the LTV was 93 percent.
No. 4 Michigan had $201 billion in property value and $171 billion in mortgage debt, while its LTV climbed to 85 percent from 84 percent.
In Georgia, the LTV increased to 80 percent from 78 percent — landing the state in the fifth-worst spot. Property values came in $319 billion, while mortgage debt was $255 billion.
One local trouble spot in the report was Riverside-San Bernardino-Ontario, Calif., where the LTV was 104 percent.
New York had the lowest LTV: 49 percent. The LTV was unchanged from the third quarter. Property values amounted to $821 billion in the Empire State, while mortgage outstanding of $399 billion were exceeded by $422 billion in home equity.
Other states with low LTVs included Hawaii’s 53 percent, Rhode Island’s 55 percent and Montana’s 57 percent.
