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Average LTVs, Negative Equity Decline

As home lenders and residential loan borrowers continued to improve their equity positions, more borrowers have found themselves above water.

As of the second quarter, there were $8.926 trillion in outstanding mortgages, growing from the previous period, when the total was $8.841 trillion.

The nation’s collective outstanding mortgage portfolio has grown considerably from the second quarter of last year, when there were $8.685 trillion in home loans outstanding.

The figures were detailed Tuesday in the Equity Report Second Quarter 2015 from CoreLogic Inc.

The average loan-to-value ratio on all U.S. mortgages was 57.3 percent as of the most-recent period.

Lenders and borrowers improved their positions compared to the first quarter, when the average LTV ratio was 58.9 percent, and the second-quarter 2014, when the ratio came in at 59.3 percent.

In Hawaii, the average LTV ratio was 43.7 percent — the lowest of any state. Next was was New York’s 45.9 percent, then California’ 49.8 percent, the District of Columbia’s 52.4 percent and Massachusetts’ 54.3 percent.

Nevada had an average LTV ratio of 70.8 percent, the highest in the country. After that was Arkansas’ 70.0 percent, then Nebraska’s 69.1 percent, Oklahoma’s 68.5 percent and Ohio’s 67.7 percent.

There were
45.9 million U.S. properties with an LTV ratio of no more than 100 percent as of the latest date.

That put the share of upside-down borrowers at 10.9 percent of all outstanding home loans.

The latest national equity position reflected an improvement over the prior period, with 759,000 residential properties moving into a positive-equity position.

As a result of the improvement, the amount of negative equity declined by $28.5 billion from three months earlier to $309.5 billion. A year earlier, negative equity amounted to $350 billion.

Among underwater borrowers, 2.6 million had a first mortgage but no home-equity loan. Another 1.7 million did have an HEL.

CoreLogic noted that 95 percent of homes valued at more than $200,000 are in a positive equity position, while the share was just 87 percent for houses worth less than $200,000.

Negative equity was most prevalent in Nevada, where 20.6 percent of all residential loans had an LTV ratio in excess of
100 percent. Florida followed with 18.5 percent of borrowers underwater, then 15.4 percent in Arizona, 13.8 percent in Rhode Island and 13.1 percent Illinois.

At the other end of the spectrum was Texas, where 97.9 percent of borrowers had positive equity. In Alaska, the positive-equity share was 97.6 percent, then 97.5 percent in Hawaii, 97.2 percent in Montana and 96.7 percent in Colorado.

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