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FirstAm CoreLogic Releases Industry-First Negative Equity Report By State

""First American CoreLogic"":http://www.facorelogic.com, a member of ""The First American Corporation"":http://www.firstam.com family of companies, today released the industry’s first state-level assessment of negative equity estimates for all single-family residential properties in the United States.
Over 7.5 million mortgagors, or 18 percent of all homeowners with a mortgage, owed more on their loans at the end of September than their properties were worth, First American CoreLogic said. The study found that an additional 2.1 million mortgages are approaching negative equity - defined as mortgages within 5 percent of being in a negative equity position. Combined, negative equity and near-negative equity mortgages account for more than a fifth (23 percent) of all properties with a mortgage, and home prices across the country continue to free fall, as ""%{=FONT-STYLE: italic}DSNews.com% reported"":http://dsnews.comview_story.cfmxid=3090 earlier this week.
Based on First American's data, the distribution of negative equity is heavily skewed to a small number of states. Nevada and Michigan have the highest percentages of negative equity - Nevada led the nation with an estimated 48 percent and Michigan was second with 39 percent. Five other states have negative equity shares in excess of 20 percent: Florida (29 percent), Arizona (29 percent), California (27 percent), Georgia (23 percent), and Ohio (22 percent).
The top six states in terms of negative equity account for over 58 percent of all negative equity mortgages, although they only account for 36 percent of all mortgages, First American CoreLogic points out. The average negative equity share among the top six is 29 percent, compared to 18 percent for the overall national average.
Excluding the top six states, the average negative equity in the remaining 44 states is 12 percent, well below the national average. New York has the lowest share of mortgages in negative equity at 7 percent, followed closely by Hawaii (8 percent), Pennsylvania (9 percent), and Montana (10 percent).
The states with high negative equity shares tend to fall into three groups, First American said. The first group is composed of states that experienced a rapid housing-price boom and speculative investments, and are now experiencing rapid price depreciation. These states include Nevada, Arizona, California, and Florida. The second group is made up of Midwestern states, such as Michigan and Ohio, that have experienced manufacturing-driven economic stagnation and have had distressed housing markets for some time. A third group is emerging: Southern states that did not necessarily experience a large housing boom, but have higher negative equity rates than the majority of states. These include Texas, Georgia, Arkansas, and Tennessee.
The First American CoreLogic Negative Equity Report covers nearly 42 million properties that have a first and/or second mortgage, which account for over 80 percent of all mortgages in the country. First American CoreLogic will continue to issue update to its report on a quarterly basis.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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