Econintersect: The number of mortgages underwater fell in 3Q/2010 to 10.8 million (22.5%). It had been 11 million at the end of the second quarter and 11.3 million at the end of 2009. The reduction does not represent good news for home prices which are continuing to fall. See here and here. The number of mortgages with negative equity is declining because foreclosures have proceeded at a faster rate than more homes go under water due to falling prices. If the price declines continue this trend could reverse. Read more…..