CoreLogic: More borrowers return to positive equity
Posted on Friday, June 6, 2014 at 9:33:36 AM
Falling behind on residential financing payments is a problem no homeowner wants to deal with, but it became an unfortunate reality following the Great Recession. However, times have changed, and more homeowners are starting to emerge from underwater home loans.
According to CoreLogic, more than 300,000 homes returned to positive equity over the first three months of 2014. However, more than 12 percent of all properties with a mortgage remain underwater. When owners owe more on their residential financing than their homes are worth, it makes it challenging to avoid debt or move from the property, limiting housing market activity.
"Prices continue to rise across most of the country and significantly fewer borrowers are underwater today compared to last year," said Anand Nallathambi, president and CEO of CoreLogic. "An additional rise in home prices of 5 percent, which we are projecting will occur over the next 12 months, will lift another 1.2 million properties out of the negative equity trap."
In addition, Black Knight Financial Services reported that despite the national trend of fewer underwater borrowers, many people who previously modified their loans are still facing negative equity. At the end of April, roughly 40 percent of modified loans were upside down.