SACRAMENTO, Calif. – The number of mortgage holders in Rhode Island with negative equity – those who owe more on their mortgage than their homes are worth – jumped almost 30 percent between the third and fourth quarters of 2008, based on the latest data from First American CoreLogic.
By the end of last year, about 15.7 percent of mortgage holders in Rhode Island were “underwater,” a term commonly used to describe negative equity, the real estate data tracker said in its Monday report. At the end of September, 12.1 percent of Rhode Island mortgages had been underwater.
Of the 205,881 mortgages recorded in Rhode Island at the end of 2008, 32,357 have negative equity. That’s a 29.4 percent increase from the 25,015 underwater mortgages reported just three months earlier, when there were 207,145 active mortgages in the Ocean State. (READ MORE)
“The acceleration 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,” CoreLogic Chief Economist Mark Fleming said in a statement. “Going forward, the worrisome issue is not just the severity of negative equity in the ‘sand’ states, but the geographic broadening of negative equity that is expected to occur throughout the year.”
Nationally, about 700,000 borrowers slipped into negative equity, bringing the total to more than 8.3 million homeowners by the end of 2008. That accounted for almost 20 percent of the 41.96 million mortgages in the county. As of the third quarter of last year, 18 percent had been underwater.
In the broader Providence-New Bedford-Fall River metro, slightly less 15.1 percent of mortgage holders were underwater as of the end of 2008.
In November, Michael Conley, a mortgage loan originator who operates a Warwick office for Milwaukee-based Shelter Mortgage, said homeowners who can make their monthly payments shouldn’t worry too much about negative equity. (READ MORE)
“Until you sell it, until you want to refinance it, it doesn’t make a difference,” he said. “And most of the people who bought in the last two years, they’re not looking to sell – they’re going to stay where they are.”
First American CoreLogic, a member of The First American Corp. group of companies, is a national provider of real estate, property and ownership data. It collects data from 7,569 ZIP codes in the 50 states and District of Columbia. For more information, visit www.CoreLogic.com.
