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CoreLogic Negative Equity Report

CoreLogic Negative Equity Report

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Published by Brad Andersohn
CoreLogic provided this report about negative equity. They are an awesome resource for data and information of this type.
CoreLogic provided this report about negative equity. They are an awesome resource for data and information of this type.

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Published by: Brad Andersohn on Jun 09, 2011
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11/20/2012

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FOR IMMEDIATE RELEASE
June 7, 2011
Media Contacts Below
NEW CORELOGIC DATA SHOWS SLIGHT DECREASE IN NEGATIVE EQUITY
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CoreLogic (NYSE: CLGX), a leading provider of information,analytics and business services, today released negative equity data showing that 10.9 million, or 22.7 percent, of all residential properties with a mortgage were in negative equity at the end of the firstquarter of 2011, down slightly from 11.1 million, or 23.1 percent, in the fourth quarter. An additional2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the firstquarter. Together, negative equity and near-negative equity mortgages accounted for 27.7 percent of allresidential properties with a mortgage nationwide. In the fourth quarter, these two categories stood at27.9 percent.
 Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more
on their mortgages than their homes are worth. Negative equity can occur because of a decline in value,an increase in mortgage debt or a combination of both.Data Highlights Nevada had the highest negative equity percentage with 63 percent of all mortgaged propertiesunderwater, followed by Arizona (50 percent), Florida (46 percent), Michigan (36 percent) andCalifornia (31 percent). The negative equity share in the top 5 states was 39 percent, down from 40 percent in the fourth quarter. Excluding the top 5 states, the negative equity share was 16 percent inthe current and previous quarter.Although the slight decline in the national negative equity share was primarily due to slightimprovements in the hardest hit states, which include Nevada (-2.7 percentage points), Arizona (-1.3 percentage points) and Florida (-1.3 percentage points), the majority of states either remainedunchanged or had minor increases.Las Vegas led the nation with a 66 percent negative equity share, followed by Stockton (56 percent), Phoenix (55 percent), Modesto (55 percent) and Reno (54 percent). Outside metropolitanareas in the top 5 negative equity states, the metropolitan markets with the highest negative equityshares include Greeley, CO (38 percent), Boise (36 percent), and Atlanta (35 percent).
 
 
FOR IMMEDIATE RELEASE
June 7, 2011
While the average negative equity borrower was upside down by $65,000, there were widedisparities by state (Figure 3). New York borrowers were upside down by an average of $129,000,the highest average in the nation, followed by other high housing cost states: Massachusetts
($120,000), Connecticut ($111,000), Hawaii ($98,000) and California ($93,000). Ohio’s negative
equity borrowers were upside down by $31,000, the lowest average in the nation, followed byIndiana ($34,000) and Minnesota ($38,000). Not only was the decline in prices a clear force driving negative equity, but borrower equityextraction also significantly increased the risk of a negative equity position. While only 18 percentof borrowers with no home equity loans were underwater at the end of the first quarter, 38 percentof borrowers with home equity loans were in a negative equity position. Over 40 percent (4.5million) of all negative equity borrowers have home equity loans.While borrowers with positive equity averaged 1.2 loans per property (Figure 4), this incidencerises to 1.6 loans per property for negative equity borrowers and it continues to rise the deeper the property is underwater. Not only does the incidence of home equity loans raise the probability of a negative equity position, but it also raises the severity of that position. A negative equity borrower without homeequity loans is upside down by an average of $52,000, versus an upside down average of $83,000for a negative equity borrower with home equity.The default rate generally rises as the current combined loan-to-value ratio (CLTV) increases;however there are differences between default rates for negative equity borrowers with homeequity loans vs. those without (Figure 5). At moderate levels of negative equity (up to 115 percentCLTV), the default rate for borrowers with home equity loans is slightly higher than those without.However, for those with severe negative equity (115 percent CLTV and above), the relationshipreverses and the default rates for mortgage loans without home equity perform slightly worse.
Many borrowers in negative equity are still able and willing to make their mortgage payments. Thosein negative equity and impacted by an income shock of some kind, such as a job loss, divorce, or death,are much more likely to be at risk of foreclosure or a short sale. The current economic indicators pointto slow yet positive economic growth, which will slowly reduce the risk of borrowers experiencing
income shocks,” said Mark Fleming, chief economist with CoreLogic. “Yet the existence of negative
equity for the foreseeable future will weigh on the housing market recovery by holding back sale andrefinance activity.
 
 
 
FOR IMMEDIATE RELEASE
June 7, 2011
STATEMortgagesNegativeEquityMortgagesNear**NegativeEquityMortgagesNegativeEquity ShareNear**NegativeEquity ShareTotal PropertyValueMortgage DebtOutstandingNet HomeownerEquityLoan-to-ValueRatio
Alabama 347,612 35,964 19,666 10.3% 5.7% 65,937,651,261 44,430,793,363 21,506,857,898 67.4%Alaska 93,313 7,129 4,933 7.6% 5.3% 25,377,580,928 16,715,319,378 8,662,261,550 65.9%Arizona 1,316,419 652,373 62,366 49.6% 4.7% 249,381,185,692 233,458,024,368 15,923,161,324 93.6%Arkansas 243,134 24,614 14,055 10.1% 5.8% 38,629,718,662 27,903,493,009 10,726,225,653 72.2%California 6,830,925 2,107,984 313,040 30.9% 4.6% 2,808,694,191,297 1,969,859,209,928 838,834,981,369 70.1%Colorado 1,135,929 229,161 90,092 20.2% 7.9% 304,290,857,857 218,385,386,174 85,905,471,683 71.8%Connecticut 820,389 105,851 30,760 12.9% 3.7% 288,819,251,105 171,817,291,549 117,001,959,556 59.5%Delaware 181,642 25,696 9,087 14.1% 5.0% 47,330,977,050 31,450,102,049 15,880,875,001 66.4%Florida 4,387,148 2,021,868 180,184 46.1% 4.1% 814,313,118,708 723,387,275,913 90,925,842,795 88.8%Georgia 1,604,759 487,118 117,650 30.4% 7.3% 309,734,676,800 250,288,332,878 59,446,343,922 80.8%Hawaii 226,977 22,403 7,498 9.9% 3.3% 118,613,164,313 64,094,639,157 54,518,525,156 54.0%Idaho 244,830 59,335 12,342 24.2% 5.0% 48,415,147,434 35,151,053,034 13,264,094,400 72.6%Illinois 2,231,895 483,517 111,048 21.7% 5.0% 515,741,486,951 372,358,790,528 143,382,696,423 72.2%Indiana 614,145 66,654 28,141 10.9% 4.6% 93,145,355,452 64,556,946,663 28,588,408,789 69.3%Iowa 354,621 31,077 15,049 8.8% 4.2% 53,802,718,936 35,988,834,099 17,813,884,837 66.9%Kansas 297,885 30,755 15,603 10.3% 5.2% 53,531,434,137 37,577,265,504 15,954,168,633 70.2%Kentucky 284,612 24,808 13,455 8.7% 4.7% 48,383,033,681 32,761,263,989 15,621,769,692 67.7%LouisianaNA NA NA NA NA NA NA NA NAMaineNA NA NA NA NA NA NA NA NAMaryland 1,352,541 321,374 67,823 23.8% 5.0% 419,945,901,353 294,295,573,091 125,650,328,262 70.1%Massachusetts 1,493,618 230,467 52,789 15.4% 3.5% 538,100,080,463 327,652,799,928 210,447,280,535 60.9%Michigan 1,378,669 496,403 74,834 36.0% 5.4% 196,362,579,091 165,369,830,671 30,992,748,420 84.2%Minnesota 570,225 91,811 29,657 16.1% 5.2% 126,590,024,340 83,776,578,479 42,813,445,861 66.2%MississippiNA NA NA NA NA NA NA NA NAMissouri 776,453 122,200 44,078 15.7% 5.7% 135,906,541,909 97,440,037,984 38,466,503,925 71.7%Montana 114,465 9,187 4,180 8.0% 3.7% 28,461,561,757 17,209,902,399 11,251,659,358 60.5%Nebraska 221,534 20,537 13,447 9.3% 6.1% 35,124,725,663 25,528,587,251 9,596,138,412 72.7%Nevada 572,139 358,241 27,381 62.6% 4.8% 100,734,349,052 115,526,819,917 -14,792,470,865 114.7%New Hampshire 215,692 40,361 11,991 18.7% 5.6% 52,161,191,417 36,538,108,818 15,623,082,599 70.0%New Jersey 1,885,017 304,871 81,079 16.2% 4.3% 665,115,435,118 414,363,076,869 250,752,358,249 62.3%New Mexico 242,811 32,538 11,581 13.4% 4.8% 55,600,736,192 37,440,529,329 18,160,206,863 67.3%New York 1,857,196 114,899 41,021 6.2% 2.2% 831,028,940,776 402,504,391,791 428,524,548,985 48.4%North Carolina 1,540,349 171,910 104,494 11.2% 6.8% 315,471,929,178 224,344,910,099 91,127,019,079 71.1%North Dakota 50,040 3,469 1,297 6.9% 2.6% 8,678,505,998 5,259,281,872 3,419,224,126 60.6%Ohio 2,198,069 482,048 139,284 21.9% 6.3% 314,345,087,077 237,419,244,061 76,925,843,016 75.5%Oklahoma 413,196 27,050 18,766 6.5% 4.5% 60,027,999,009 42,970,098,215 17,057,900,794 71.6%Oregon 696,142 119,533 40,147 17.2% 5.8% 175,071,730,159 121,941,948,546 53,129,781,613 69.7%Pennsylvania 1,817,020 137,080 63,960 7.5% 3.5% 398,060,169,443 241,318,288,015 156,741,881,428 60.6%Rhode Island 228,964 48,507 8,567 21.2% 3.7% 63,102,016,184 39,606,928,661 23,495,087,523 62.8%South Carolina 611,936 93,104 39,675 15.2% 6.5% 131,338,046,542 93,179,301,100 38,158,745,442 70.9%South DakotaNA NA NA NA NA NA NA NA NATennessee 973,697 137,371 69,703 14.1% 7.2% 166,906,763,150 119,009,956,279 47,896,806,871 71.3%Texas 3,307,047 335,446 177,410 10.1% 5.4% 609,632,665,235 416,765,892,435 192,866,772,800 68.4%Utah 472,814 100,041 30,130 21.2% 6.4% 113,960,084,825 83,482,887,312 30,477,197,513 73.3%VermontNA NA NA NA NA NA NA NA NAVirginia 1,263,634 291,349 76,348 23.1% 6.0% 414,110,987,255 293,214,942,345 120,896,044,910 70.8%Washington 1,412,110 238,476 81,260 16.9% 5.8% 429,103,195,630 291,720,399,771 137,382,795,859 68.0%Washington, DC 99,566 14,639 4,413 14.7% 4.4% 48,301,287,452 28,333,913,140 19,967,374,312 58.7%West VirginiaNA NA NA NA NA NA NA NA NAWisconsin 640,224 92,640 32,305 14.5% 5.0% 120,980,473,290 82,861,861,847 38,118,611,443 68.5%WyomingNA NA NA NA NA NA NA NA NAUS 48,012,368 10,905,978 2,409,767 22.7% 5.0% 12,516,760,346,091 8,724,373,363,720 3,792,386,982,371 69.7%*This data only includes properties with a mortgage. Non-mortgaged properties are by definition not included.** Defined as properties in negative equity or within 5% of being in a negative equity position.
Q1 2011 Negative Equity by State*
Properties With a Mortgage Outstanding$ Outstanding
 

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