Santa Ana-based First American CoreLogic just minutes ago released a grim look at the mortgage crisis, reporting that 32.2 percent of all U.S. mortgages were tied to homes worth less then the amount of their loans.
In California, it says, 42 percent of mortgages are in that condition often referred to as “under water.” The report says 2.9 million California mortgages are in a state of negative equity and 3.1 million more are nearing it as the housing crisis persists and the economy worsens.
Nationally, 15.2 million mortgages tied to $3.4 trillion worth of residential property are in a negative equity position, and consequently in some danger of foreclosure, says First American.
The firm didn’t immediately have a Sacramento-area breakdown, but in the past has said that more than one-third of the region’s mortgages were in that condition. We have an email into the firm to try and get the regional picture.
“Negative equity continues to be the dominant driver of the mortgage market because it leads to foreclosures in the event a borrower experiences some kind of economic shock such as a job loss, illness or other adverse situation. Given that negative equity did not increase this quarter and home prices declines are moderating or flattening, we may be at the peak of the negative equity cycle. However, until negative equity recedes and unemployment declines, mortgage risk will continue to be very elevated,” said Mark Fleming, chief economist for First American CoreLogic.
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