Not so rosy: Seattle 'underwater' owners reach 40 percenton May 24, 2012 @ 6:53 pm (Updated: 5:24 am - 5/29/12 )
Nearly 40 percent of Seattle area homeowners owe more than their home is worth, up slightly from late last year, according to the first-quarter Zillow Negativity Activity Report.
The Seattle-based online real estate company also revealed that 10.2 percent of Seattle borrowers are "seriously delinquent" - 90 days or more behind on payments.
Pierce County led all counties in the state in "underwater" homeowners, registering 50 percent in the Zillow report.
Nationally, nearly one-third (31.4 percent) of U.S. homeowners with mortgages - or 15.7 million - were underwater on their mortgage. Collectively, underwater homeowners owed $1.2 trillion more than their homes were worth. Negative equity rose slightly from 31.1 percent in the fourth quarter, and declined from 32.4 percent one year ago.
"While it was disappointing to see negative equity numbers remain so high, it is important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners," said Stan Humphries, Zillow's chief economist. "As home values slowly increase and these homeowners continue to pay down their principal, they will surface again. . ."
Negative equity remained high despite increasing home values in the latter part of the first quarter. A slower pace of foreclosures after the robo-signing issues of 2010 contributed to slower progress in working down negative equity. Foreclosures cause homes to come out of negative equity when a bank or third party takes ownership.
Despite the high rate of negative equity, the majority of underwater homeowners are current on their mortgages. Nine in 10 continue to make their mortgage and home loan payments on time, with just 10.1 percent of underwater homeowners more than 90 days delinquent.
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