The number of U.S. borrowers whose loan-to-value exceeded 100 percent eased in the first quarter.
As of the end of March, just under 11.3 million residential properties had a mortgage that exceeded the value of the property, CoreLogic reported today. Negative-equity properties accounted for 24 percent of all financed properties.
CoreLogic, which is separating from the First American Corp. to become part of publicly traded CoreLogic Inc. on June 1, said its findings were based on data from 47 million properties that account for more than 85 percent of U.S. mortgages.
The latest three-month period was a slight improvement from the fourth-quarter 2009’s 11.3 million borrowers — though the share was the same. “Deeply underwater borrowers,” those with loan-to-values of at least 125 percent, improved to 4.9 million borrowers with $656 billion in loans representing 10.4 percent of mortgages from the fourth quarter’s 5.0 million borrowers for 10.6 percent.
CoreLogic noted that an additional 2.3 million borrowers had less than 5 percent equity in the first quarter.
Negative equity was worst in Nevada, where 70 percent of all borrowers were upside-down. With a 75 percent rate, Las Vegas was responsible for the poor showing in the Silver State.
Arizona’s 51 percent was next, followed by Florida’s 48 percent, Michigan’s 39 percent and California’s 34 percent.
The report indicated that 38 percent of U.S. borrowers with subordinate financing had negative equity, while only 19 percent of borrowers with no junior liens had negative equity. Similarly, the foreclosure rate for borrowers with junior liens was 4 percent, while the rate was just 2 percent for borrowers who only had a first mortgage.
CoreLogic Chief Economist Mark Fleming said negative equity, as well as unemployment, are “the two most important triggers of default” and noted both have stabilized during the past six months.
