9.1 million U.S. residential properties were seriously underwater in the first quarter of 2014, according to RealtyTrac's U.S. Home Equity & Underwater Report. Seriously underwater properties are homes where the combined loan amount secured by the property is at least 25 percent higher than the property's estimated market value. Underwater properties in the first quarter of 2014 decreased to the lowest level since RealtyTrac began reporting data in 2012, and decreased from the previous quarter's number of 9.3 million properties.
Homes with positive equity increased to 35 percent in the first quarter of 2014, up from 31 percent in the fourth quarter of 2013. The report also found that fewer distressed properties had negative equity, with 45 percent of all properties in the foreclosure process underwater. Foreclosed homes with negative equity fell from 48 percent in the last quarter of 2013, and were down from 58 percent in the first quarter of 2013. States with the highest percentage of residential properties seriously underwater were Nevada, Florida, Illinois, Michigan, and Ohio.
Legal expenses took a substantial bite out of Bank of America's first-quarter earnings, resulting in a net loss of $276 million to start the year. The loss follows a profitable fourth quarter of 2013, which saw the bank taking in $3.4 billion. For the first quarter of 2013, Bank of America reported net income of $1.5 billion. The results for the first quarter include $6 billion in litigation expenses related to a major settlement the Federal Housing Finance Agency over legacy securities claims.