Article at RISMedia.com by Alejandro Lazo

December 15, 2010 - The number of homeowners in the U.S. who owe more on their propeties than what those homes are worth has declined steadily for most of 2010, according to Santa Ana, California research firm CoreLogic. But the drop in properties with negative equity has more to do with troubled borrowers losing their homes to forclosure than an increase in prices. About 10.8 million, or 22.5% of residential properties with mortgages were in negative equity positions at the end of the third quarter. That is down from 11 million, or 23%, in the second quarter.

The number of underwater borowers has declined by more than 50,000 during the first nine months of 2010, according to CoreLogic.

"Negative equity is a primary factor holding back the housing market and broader economy," CoreLogic Chief Economist Mark Fleming said. "The good news is that negative equity is slowly declining, but the bad news is that price declines are accelerating, which may put a stop to or reverse the recent improvement."

About 2.4 million borrowers had very little equity, less than 5%, at the end of the third quarter. Underwater and near-underwater loans accounted for 27.5% of all U.S. mortgages.

The states with the most underwater mortgages at the end of the third quarter were Nevada with 67%, Arizona with 49%, Florida with 46%, Michigan with 38% and California with 32%.