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CoreLogic: 1.4 million Homes Moved Into Positive Equity In 3Q's of 2012

January 17th, 2013
in econ_news, syndication

Econintersect: CoreLogic reported that the number of residential properties in negative equity declined in 3Q2012.  Negative equity means that the home is worth less than the mortgage.

“Through the third quarter, the number of underwater borrowers declined significantly,” said Mark Fleming, chief economist for CoreLogic. “The substantive gain in house prices made in 2012, partly due to tight inventory caused by negative equity’s lock-out effect, has paradoxically alleviated some of the pain.”

Follow up:

[click to enlarge]

Highlights of the CoreLogic Report:

  • Nevada had the highest percentage of mortgaged properties in negative equity at 56.9 percent, followed by Florida (42.1 percent), Arizona (38.6 percent), Georgia (35.6 percent) and Michigan (32 percent). These top five states combined account for 34 percent of the total amount of negative equity in the U.S.
  • Of the total $658 billion in aggregate negative equity, first liens without home equity loans accounted for $323 billion aggregate negative equity, while first liens with home equity loans accounted for $334 billion.
  • 6.6 million upside-down borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $214,000. The average underwater amount is $49,000.
  • 4.1 million upside-down borrowers possess both first and second liens. The average mortgage balance for this group of borrowers is $298,000.The average underwater amount is $82,000.
  • Approximately 41 percent of borrowers with first liens without home equity loans had loan-to-value (LTV) ratios of 80 percent or higher and approximately 61 percent of borrowers with first liens and home equity loans had combined LTVs of 80 percent or higher.
  • At the end of the third quarter 2012, 17.1 million borrowers possessed qualifying LTVs between 80 and 125 percent for the Home Affordable Refinance Program (HARP) under the original requirements first introduced in March 2009. The lifting of the 125 percent LTV cap via HARP 2.0 opens the door to another 4.6 million borrowers.
  • The bulk of negative equity is concentrated in the low end of the housing market. For example, for low- to mid-value homes (less than $200,000), the negative equity share is 28.7 percent, almost twice the 14.6 percent for borrowers with home values greater than $200,000.
  • As of Q3 2012, there were 1.8 million borrowers who were only 5 percent underwater, who if home prices continue increasing over the next year, could return to a positive equity position.

Read the CoreLogic Report

 

 









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