Underwater mortgages drop 3.4% in 1Q

THE NUMBER OF UNDERWATER homes in the Providence-Fall River-New Bedford area dropped 3.4 percent in the first quarter of 2012 from the fourth quarter of last year. For a larger version of this map, click HERE.
Posted 7/12/12

PROVIDENCE – The number of underwater homes in the Providence-Fall River-New Bedford area dropped 3.4 percent in the first quarter of 2012 from the fourth quarter of last year, CoreLogic said Thursday.

There were 77,267 properties in the Providence metro area worth less than the outstanding mortgages on them in the first three months of this year, according to the Santa Ana, Calif.-based real estate data firm, down from 80,011 in the last three months of the 2011.

That dropped the area’s rate of underwater mortgages to 22.3 percent, down from 23.1 percent in the fourth quarter of 2011.

In addition to the underwater homes, 13,236 Providence area properties have near-negative equity, with values within 5 percent of their outstanding loan balances.

In Rhode Island along, 53,208 homes were underwater during the first quarter, 23.3 percent of all properties with mortgages, and 8,644 were in near negative equity.

The Ocean State had 59.7 billion in total residential property in the first quarter and $39.5 million in outstanding mortgage debt, for a loan-to-value ratio of 66.1 percent.

Massachusetts had 250,166 underwater properties in the first quarter, 3.5 percent, and a loan-to-value ratio of 62.2 percent.

Nationwide, there were 11.4 million homes underwater in the first quarter, or 23.7 percent, down from 12.1 million, or 25.2 percent, in the fourth quarter of last year.

“In the first quarter of 2012, rebounding home prices, a healthier balance of real estate supply and demand, and a slowing share of distressed sales activity helped to reduce the negative equity share,” Mark Fleming, chief economist for CoreLogic, said in the report.

“This is a meaningful improvement that is driven by quickly improving outlooks in some of the hardest hit markets,” added Fleming. “While the overall stagnating economic recovery will likely slow housing market recovery in the second half of this year, reducing the number of underwater households is an important step toward reducing future mortgage default risk.”

The drop in underwater homeowners in the Providence area is likely a result of lenders foreclosing on some underwater properties, as home prices continued to decline in the first quarter.

For the full report, visit www.corelogic.com.

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