The number of mortgages with negative equity fell nearly 2% in the third quarter from the previous quarter mostly due to foreclosures, according to a CoreLogic report issued Monday morning.The third quarter report shows there are 10.8 million single-family loans or 22.5% of all mortgages under water, compared to 11 million in the second quarter.
"This is primarily due to foreclosures of severely negative equity properties rather than an increase in home values," CoreLogic's chief economist Mark Fleming said.
The provider of financial and property information defines negative equity as a mortgage with a loan-to-value ratio of 105% and higher.
Nearly 10% of all mortgages have LTVs of 125% or more.
Using its real estate and mortgage data bases, CoreLogic estimates that the number of borrowers in negative equity declined by over 500,000 from a year ago.
"Negative equity is a primary factor holding back the housing market and broader economy. 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 in negative equity," Fleming said.