12 States Where Homeowners Are Sinking Deeper Into Negative Equity

negative equity, housing, property

Photo: John Moore/Getty Images)

In the fourth quarter of 2011, 11.1 million residential properties with a mortgage were in negative equity, i.e. the property owners owed more on their mortgages than their property was worth.  The figure is up from 10.7 million the previous quarter, according to latest data by CoreLogic.Of all residential properties with a mortgage, 22.8 per cent were in negative equity, or underwater.

CoreLogic’s chief economist Mark Fleming said mortgages in negative equity as a share of all mortgages rose late in 2011 because of seasonal decline in home prices, and a slowdown in the foreclosure pipeline which also weighed on home prices:

“The high level of negative equity and the inability to pay is the ‘double trigger’ of default, and the reason we have such a significant foreclosure pipeline. While the economic recovery will reduce the propensity of the inability to pay trigger, negative equity will take an extended period of time to improve, and if there is a hiccup in the economic recovery, it could mean a rise in foreclosures.”

Using CoreLogic data, we ranked the 12 states that had the most underwater mortgages as a percentage of all mortgages. On average, the five worst states had an average of 44.3 per cent of mortgages underwater, up from 41.4 per cent the previous quarter.

Note: Loan-to-Value (LTV) ratio is a measure used by financial institutions to gauge risk before approving a mortgage. The higher the LTV ratio, the higher the risk and the more expensive the loan.

Illinois

Negative equity share:
21.7%

Total mortgages:
2,251,574

Overall loan-to-value ratio:
72.5%

Source: CoreLogic

Rhode Island

Negative equity share:
22.8%

Total mortgages:
229,450

Overall loan-to-value ratio:
65.2%

Source: CoreLogic

Virginia

Negative equity share:
23.0%

Total mortgages:
1,320,708

Overall loan-to-value ratio:
71.8%

Source: CoreLogic

Ohio

Negative equity share:
23.9%

Total mortgages:
2,207,464

Overall loan-to-value ratio:
76.7%

Source: CoreLogic

Maryland

Negative equity share:
24.3%

Total mortgages:
1,360,309

Overall loan-to-value ratio:
70.9%

Source: CoreLogic

Idaho

Negative equity share:
25.0%

Total mortgages:
256,883

Overall loan-to-value ratio:
73.5%

Source: CoreLogic

California

Negative equity share:
29.9%

Total mortgages:
6,829,717

Overall loan-to-value ratio:
71.2%

Source: CoreLogic

Georgia

Negative equity share:
33.0%

Total mortgages:
1,638,192

Overall loan-to-value ratio:
82.5%

Source: CoreLogic

Michigan

Negative equity share:
34.7%

Total mortgages:
1,383,586

Overall loan-to-value ratio:
83.5%

Source: CoreLogic

Florida

Negative equity share:
44.2%

Total mortgages:
4,334,505

Overall loan-to-value ratio:
87.2%

Source: CoreLogic

Arizona

Negative equity share:
48.3%

Total mortgages:
1,305,568

Overall loan-to-value ratio:
93.1%

Source: CoreLogic

Nevada

Negative equity share:
61.1%

Total mortgages:
561,341

Overall loan-to-value ratio:
113.8%

Source: CoreLogic

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