More than 18 percent of Illinois mortgages are underwater

More than 18 percent of Illinois mortgages are underwater
By Mary Ellen Podmolik
Copyright © 2009, Chicago Tribune
10:09 a.m. CST, November 24, 2009
http://www.chicagotribune.com/business/chi-biz-underwater-homeowners-1124-,0,7503564.story


Almost 410,000 Illinois mortgages, or 18.4 percent of home loans, were underwater in September, meaning homeowners owed more on their mortgages than their homes were worth.

A report issued Tuesday by data provider First American CoreLogic also found that another 5.1 percent of Illinois mortgages are in danger of falling underwater, meaning the homeowners had less than 5 percent equity in their properties.

On a national level, the mortgages on nearly 10.7 million homes, or 23 percent of properties, were considered underwater in September. An additional 2.3 million mortgages were in a near-negative equity position.

Weighing heavy on the national numbers are five states that accounted for 42 percent of all negative equity loans. They were Nevada, where 65 percent of loans were underwater; Arizona, 48 percent; Florida, 45 percent; Michigan, 37 percent; and California, 35 percent.

First American said shared characteristics of underwater borrowers included that they financed properties between 2005 and 2008; purchased newly built homes in a small concentration of states; relied on adjustable-rate mortgages; and bought less expensive properties.

"Negative equity continues to be pervasive and to impact almost every segment of the housing market," said Mark Fleming, the company's chief economist. "The recent improvement in home prices this past spring and summer has slowed the increase in negative equity, but it will take a significant rebound in home prices, which we are not expecting, to offset the dampening effects of negative equity in the most depressed states."

The company's data included 47 million properties with a mortgage, which accounts for more than 90 percent of all U.S. mortgages.

mepodmolik@tribune.com