More than half of AZ mortgages upside down

More than 11.3 million, or 24 percent, of all residential properties with mortgages, were in negative equity at the end of the fourth quarter, up from 10.7 million and 23 percent at the end of the third quarter, according to a new report.

Negative equity, often referred to as “underwater” or “upside down,” means that borrowers owe more on their mortgage than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

The report by Santa Ana, Calif.-based First American CoreLogic Inc., a real estate information company, says 51 percent of the mortgaged properties in Arizona are underwater. That’s the second worst rate in the nation behind Nevada, at 70 percent.

Behind Arizona was Florida (48 percent), Michigan (39 percent) and California (35 percent).

“Negative equity is a significant drag on both the housing market and on economic growth. It is driving foreclosures and decreasing mobility for millions of homeowners,” said Mark Fleming, chief economist with First American CoreLogic, in a statement.

First American CoreLogic’s data includes 47 million properties with a mortgage, which accounts for more than 85 percent of all mortgages in the U.S.

Phoenix Business Journal – by Barton Eckert Contributing Writer