Report: 20% of Home Mortgages Were Underwater in December

What a sad state of affairs, 1 in 5 families owing more on their homes than they are worth. The economy will not stabilize until home prices level off and start moving higher., and when they do inflation will be the big story.-Lou

Report: 20% of Home Mortgages Were Underwater in December

By AMY HOAK MarketWatch

CHICAGO -- Twenty percent of all U.S. residential properties that had a mortgage on them were underwater at the end of December, with mortgage debt greater than what the homes were worth, according to a report released Wednesday by First American CoreLogic.

That's more than 8.3 million mortgages that were upside down at the end of the year, compared with 7.6 million three months earlier. It's a problem that is expected to get worse as home prices continue to fall.

"The accelerating share of negative equity, combined with deteriorating economic conditions, means that mortgage risk will continue to increase until home prices and the economy begin to stabilize," said Mark Fleming, chief economist of First American CoreLogic, in a news release. First American CoreLogic is a Santa Ana, Calif.-based provider of real estate data and mortgage analytics.

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