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Biggest Quarterly Drop in Underwater Homes since Peak

The company reports that as of December homes nationwide that were seriously underwater, that is with loan-to-value ratios exceeding 125 percent, numbered 9.3 million or 19 percent of all properties with a mortgage. This is down from 10.7 million properties or 23 percent of mortgaged homes that were deeply underwater in September. At the peak, in May 2012 the numbers stood at 12.8 million properties or 29 percent.

In December, of a total of 239,470 properties in foreclosure, 48 percent were valued at least 25 percent less than their outstanding mortgage balance, 60,000 fewer than in September when 56 percent were deeply underwater. Another 31 percent had some equity in December compared to 24 percent in September.

Homeowners who retained equity during the period of plummeting prices and rising foreclosures are now also benefiting as well from rising prices and watching that equity grow. The universe of equity-rich properties, defined as 50 percent or more, grew during the fourth quarter from 7.4 million representing 16 percent of all residential properties with a mortgage in September, to 9.1 million representing 18 percent in December.

 

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Jann Swanson
Rising home prices are returning more and more homes to a positive equity position and RealtyTrac said today that about 31 percent of the homes currently in the process of foreclosure now appear to have some value above the balances of their mortgages.