R.I. again among top five states with ‘upside down’ mortgages

RHODE ISLAND AGAIN ranked among the top five states in the fourth quarter for having the highest percentage of mortgaged properties in negative equity. / COURTESY CORELOGIC
RHODE ISLAND AGAIN ranked among the top five states in the fourth quarter for having the highest percentage of mortgaged properties in negative equity. / COURTESY CORELOGIC

PROVIDENCE – Rhode Island again ranked among the top five states with the highest percentage of mortgaged properties in negative equity in the fourth quarter at 15.8 percent, according to data released Tuesday by CoreLogic.
Nevada had the highest percentage of mortgaged properties in negative equity at 24.2 percent, followed by Florida at 23.2 percent; Arizona, 18.7 percent; Illinois, 16.2 percent, and Rhode Island, 15.8 percent. These five states accounted for 31.7 percent of negative equity in the United States.
In the Providence-Warwick metropolitan area, 14.7 percent, or 52,281 of all residential properties with a mortgage, were in negative equity in the fourth quarter, a drop from 17.3 percent, or 61,026 properties, in the fourth quarter of 2013.
An additional 3 percent, or 10,487 residential properties, were in near negative equity in the fourth quarter, compared with 3.3 percent, or 11,728 properties in fourth quarter 2013.
Negative equity means borrowers owe more on their home than its market value. This can occur because of a decline in value, an increase in mortgage debt, or both. Negative equity is often referred to as “upside down” or “underwater.”
CoreLogic said 1.2 million borrowers regained positive equity in 2014, bringing the total number of mortgaged residential properties with home values greater than their mortgages at the end of the fourth quarter to approximately 44.5 million, or 89 percent of all mortgaged properties.
Nationally, 10.8 percent of all mortgaged properties – 5.4 million – were underwater in the fourth quarter.
“The share of home owners that had negative equity increased slightly in the fourth quarter of 2014, reflecting the typical weakness in home values during the final quarter of the year,” Frank Nothaft, chief economist for CoreLogic, said in a statement. “Our CoreLogic [Home Price Index] dipped 0.7 percent from September to December, and the percent of owners ‘underwater’ increased to 10.8 percent. However, from December-to-December, the CoreLogic index was up 4.8 percent, and the negative equity share fell by 2.6 percentage points.”
Anand Nallathambi, president and CEO of CoreLogic, said negative equity continued to be a serious issue for the housing market and U.S. economy at the end of 2014 with 5.4 million homeowners “still ‘underwater.’”
“We expect the situation to improve over the course of 2015. We project that the CoreLogic Home Price Index will rise 5 percent in 2015, which will lift about 1 million homeowners out of negative equity,” Nallathambi said.

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