# Outlook still bleak for underwater borrowers

**CoreLogic**, a provider of information, analytics and business services, has released data showing that 10.7 million, or 22.1%, of all residential properties with a mortgage were in negative equity at the end of the third quarter of 2011. This is down slightly from 10.9 million properties, or 22.5%, in the second quarter.

An additional 2.4 million borrowers had less than 5% equity, referred to as near-negative equity, in the third quarter. Together, negative equity and near-negative equity mortgages accounted for 27.1% of all residential properties with a mortgage nationwide in the third quarter, down from 27.5% in the previous quarter.

Nevada has the highest negative equity percentage with 58% of all of its mortgaged properties underwater, followed by Arizona (47%), Florida (44%), Michigan (35%) and Georgia (30%). This is the first quarter that Georgia entered the top five, surpassing California, which had been in the top five since tracking began in 2009.

Some other highlights from the study:

• There are nearly 22 million borrowers, or 45% of all borrowers, who have mortgages with an 80% or more loan-to-value (LTV) ratio, and 69% of those mortgages have above-market interest rates of 5% or more. Borrowers with above-average LTV ratios often find it hard to qualify for today’s historically low interest rates, CoreLogic noted.

• Of the 10.7 million borrowers in negative equity, there are 6.3 million first liens without home equity loans that have an average mortgage balance of $222,000. They are underwater by an average of $52,000. The remaining 4.4 million negative equity borrowers hold first liens and home equity loans with an average mortgage balance of $309,000. These borrowers are underwater by an average of $84,000.

There are 8.6 million conventional loans in a negative equity position that have an average mortgage balance of $272,000 and are underwater by an average of $70,000.

There are 1.5 million FHA loans in a negative equity position that have an average mortgage balance of $170,000 and are underwater by an average of $26,000.