U.S. borrowers who owed more than their properties were worth accounted for a smaller share of all residential borrowers in the third quarter. Georgia’s latest negative-equity rate, meanwhile, thrust it into one of the five worst positions.
As of Sept. 30, there were 10.7 million U.S. properties with loan-to-value ratios in excess of 100 percent. Borrowers who only had first liens and no home-equity loans accounted for 6.3 million of the total.
That information was delivered Tuesday by CoreLogic. The company says its database includes 48 million properties accounting for 85 percent of all U.S. mortgages. The home values were determined using automated valuation models.
The total number of negative-equity properties declined from 10.9 million as of June 30. Upside-down borrowers numbered 10.8 million at the same point during 2010.
The third-quarter 2011 figure included 8.6 million conventional loans and 1.5 million loans insured by the Federal Housing Administration. CoreLogic estimates that the total included 1.6 million portfolio mortgages.
The latest total represented 22.1 percent of all residential properties with a mortgage. In addition, another 5 percent of financed properties had less than 5 percent equity.
“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” CoreLogic Chief Economist Mark Fleming said in the announcement. “The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”
With 58 percent of properties in Nevada being upside-down, the Silver State ranks worse than any of its 49 counterparts. But Nevada’s negative-equity rate improved from 60 percent in the second quarter.
Arizona, Florida and Michigan followed with respective negative-equity rates of 47 percent, 44 percent and 35 percent.
Georgia, which had a 30 percent rate, unseated California as the fifth worst state. Georgia’s ascension to a top-five position came despite a decline in its rate from 30.2 percent three months earlier. California had been among the five-worst states since CoreLogic began tracking negative equity in 2009.
