From: Lori Guyton []
Sent: Monday, May 10, 2010 7:31 AM
To: Wasserman, Jim - Sacramento
Subject: Sacramento-Arden-Arcade-Roseville Real Estate News and Trends
CoreLogic Sacramento--Arden-Arcade--Roseville Real Estate News and Trends

Media Contacts Below

Media Alert: May 10, 2010


CoreLogic* reported today that more than 11.2 million, or 24 percent, of all residential properties with mortgages, were in negative equity at the end of the first quarter of 2010, down slightly from 11.3 million and 24 percent from the fourth quarter of 2009. An additional 2.3 million borrowers had less than five percent equity. Together, negative equity and near-negative equity mortgages accounted for over 28 percent of all residential properties with a mortgage nationwide.

Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgage than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

In Sacramento--Arden-Arcade--Roseville, 44.8 percent, or 222,076, of all residential properties with a mortgage were in negative equity for Q1 2010. An additional 4.4 percent, or 21,865, were in near negative equity in Sacramento--Arden-Arcade--Roseville.

National Data Highlights

  • Negative equity continues to be concentrated in five states: Nevada, which had the highest percentage negative equity with 70 percent of all of its mortgaged properties underwater, followed by Arizona (51 percent), Florida (48 percent), Michigan (39 percent) and California (34 percent). Las Vegas remains the top ranked CBSA with 75% of mortgaged properties being underwater, followed by Stockton (65%), Modesto (62%), Vallejo-Fairfield (60%) and Phoenix (58%). Phoenix had more than 550,000 underwater borrowers, the most households of any metropolitan market in the country. Riverside (463,000), Los Angeles (406,000) Atlanta (399,000) and Chicago (365,000) round out the top five markets.
  • The share of borrowers whose mortgage debt exceeds the property value by 25% or more fell slightly to 10.4% or 4.9 million borrowers, down from 10.6% or 5 million borrowers. The aggregate dollar value of negative equity for these deeply underwater borrowers was $656 billion dollars.
  • The negative equity share for borrowers with junior liens, such as closed end second liens or home equity lines of credit (HELOC), was 38% compared to 19% for borrowers that did not have a junior lien. The foreclosure rate for borrowers with junior liens was 4%, compared to 2% for borrowers without junior liens.

"The two most important triggers of default, negative equity and unemployment, have stabilized over the last six months. As house prices grow again and borrowers pay down their mortgage debt negative equity levels will begin to diminish. The typical underwater borrower is likely to regain their lost equity over the next five to seven years," said Mark Fleming, chief economist with CoreLogic.

State and top 50 CBSA negative equity data is available on at the following address:

*Note: First American CoreLogic is now a part of CoreLogic, Inc. and will be separating from The First American Corporation. CoreLogic will continue to be the most comprehensive source of U.S. real estate, mortgage application, fraud and loan performance data. As CoreLogic, the company is larger and more diverse, encompassing more than 20 different business entities in the areas of data, analytics and information services. As CoreLogic, the company is also a leading provider of automotive credit reporting, property tax, valuation, flood determination and geospatial analytics. On June 1, 2010 CoreLogic expects to officially split off from First American and become a publicly traded company listed on the NYSE under the symbol CLGX.


CoreLogic's data includes 47 million properties with a mortgage, which accounts for over 85 percent of all mortgages in the U.S.** CoreLogic used its public record data as the source of the mortgage debt outstanding (MDO) and it includes 1st mortgage liens and junior mortgage liens and is adjusted for amortization and home equity utilization in order to capture the true level of mortgage debt outstanding for each property. The current value was estimated by using the First American CoreLogic Automated Valuation Models (AVM) for residential properties. The data was filtered to include only properties valued between $30,000 and $30 million because AVM accuracy tends to quickly worsen outside of this value range.

The amount of equity for each property was determined by subtracting the property's estimated current value from the mortgage debt outstanding. If the mortgage debt was greater than the estimated value, then the property is in a negative equity position. The data was created at the property level and aggregated to higher levels of geography.

** Only data for mortgaged residential properties that have an AVM value is presented. There are several states where the public record, AVM or mortgage coverage is thin. Although coverage is thin, these states account for fewer than 5 percent of the total population of the U.S.




Media Contacts:

For real estate industry and trade media:
Bill Campbell
(212) 995.8057 (office)
(917) 328.6539 (mobile)
For general news media:
Lori Guyton
(901) 277.6066