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10% of San Diego-area mortgages negative

In the San Diego-Carlsbad area, 10 percent, or 58,637 of all residential properties with a mortgage were in negative equity as of the first quarter 2014, according to CoreLogic.

The first quarter data is compared to 11.5 percent, or 67,309 properties, in the fourth quarter of 2013.

An additional 2.3 percent, or 13,417 residential properties, were in near negative equity for first quarter 2014 compared to 2.5 percent, or 14,386, in fourth quarter 2013.

Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgages 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.

Nationwide, more than 300,000 homes returned to positive equity in the first quarter of 2014, bringing the total number of mortgaged residential properties with equity to more than 43 million.

The CoreLogic (NYSE: CLGX) analysis indicates that approximately 6.3 million homes, or 12.7 percent of all residential properties with a mortgage, were still in negative equity as of the first quarter of 2014 compared to 6.6 million homes, or 13.4 percent for the 2013 fourth quarter.

The negative equity share was 20.2 percent, or 9.8 million homes, in the 2013 first quarter.

Borrowers with less than 20 percent equity, referred to as "under-equitied," may have a more difficult time refinancing their existing home, or obtaining new financing to sell and buy another home due to underwriting constraints.

Under-equitied mortgages accounted for 20.6 percent of all residential properties with a mortgage nationwide in 2014's first quarter, with more than 1.5 million residential properties at less than five percent equity, referred to as near-negative equity.

Properties that are near-negative equity are considered at risk if home prices fall.

"Despite the massive improvement in prices and reduction in negative equity over the last few years, many borrowers still lack sufficient equity to move and purchase a home," said Sam Khater, deputy chief economist for CoreLogic. "One in five borrowers have less than 10 percent equity in their property, which is not enough to cover the down payment and additional costs associated with a conventional mortgage."

Nationally, the number of homes with equity had a default rate of 0.6 percent, the same as in the previous quarter. However, homes with negative equity had a default rate of 3.5 percent as of 2014's first quarter, down from 3.7 percent in 2013's fourth period.

The bulk of home equity for mortgaged properties is concentrated at the high end of the housing market.

For example, 93 percent of homes valued at greater than $200,000 have equity compared with 82 percent of homes valued at less than $200,000.

Of the total $384 billion in negative equity, first liens without home equity loans accounted for $200 billion aggregate negative equity, while first liens with home equity loans accounted for $184 billion.

Approximately 3.8 million underwater borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $218,000. The average underwater amount is $52,000.

Approximately 2.5 million underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $290,000.The average underwater amount is $75,000.

Nevada had the highest percentage of mortgaged properties in negative equity at 29.4 percent. Arizona was fourth at 20.1 percent. The top five states combined account for 31.1 percent of negative equity in the United States.

Of the 25 largest Core Based Statistical Areas (CBSAs) based on population, Tampa-St. Petersburg-Clearwater, Fla., had the highest percentage of mortgaged properties in negative equity at 29.5 percent. Phoenix-Mesa-Scottsdale, Ariz. was third at 20.6 percent.

Texas had the highest percentage of mortgaged residential properties in an equity position at 96.7 percent.

Of the largest 25 Core Based Statistical Areas (CBSAs) based on population, Houston-The Woodlands-Sugar Land, Texas had the highest percentage of mortgaged properties in an equity position at 97.0 percent.

Anaheim-Santa Ana-Irvine, Calif. was third at 95.6 percent, followed by Portland-Vancouver-Hillsboro, Ore. (94.8) and Seattle-Bellevue-Everett, Wash. (93.7).

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