24% of all Mortgages Nationwide are Underwater

First American Core Logic released its 4th quarter negative equity report today and the results were worse than expected.

According to First American Core Logic, "More than 11.3 million homes or 24% of homes with a mortgage had negative equity at the end of 2009, up from 10.7 million and 23% at the end of the third quarter of 2009. An additional 2.3 million were approaching negative equity by the end of the year, meaning they had less than 5% equity. Together the negative equity and near negative equity mortgages accounted for 29% of all residential properties with a mortgage nationwide."

California was among the 5 highest states with negative equity, with 35% of all loans statewide upside down. Although California, Nevada, Florida, Michigan and Arizona made up 70% of all the negative equity, 2o additional states had growing negative equity problems. This means that the problem is widespread throughout the country.

"The dollar value of negative equity was $801 Billion up from $764 at the end of the quarter 3 2009. The average negative equity for an underwater borrower was $70,700 up from $69,700 at the end of the 3rd quarter 2009. The segment of borrowers that are 25% or more in negative equity account for over $660 Billion in negative equity."

Not all borrowers underwater will default, and for now their numbers, which aren't good, are still at a point where the banks can absorb the losses. But if the numbers keep on rising and more borrowers exceed the 25% negative equity mark, which is likely to happen, we definitely will be seeing more foreclosures and more banking troubles. Hold on, by the time the Government figures out what to do, if anything, we will be in the middle of yet another housing crisis.