Bay Area real estate: those underwater mortgages are drying up

Going, going, but not quite gone.

We're talking about homeowners whose mortgages are underwater. A new report from CoreLogic, the real estate information service, shows that 6.4 percent of properties in Alameda and Contra Costa counties remained in negative equity at the end of 2015.

But that was down from 9.3 percent a year earlier -- and far removed from the end of 2009, when 36.3 percent of mortgages in those East Bay counties were in negative equity as the recession took hold and the housing market crashed.

"The decline in negative equity mainly reflects rising home values and people paying down their mortgages," said Andrew LePage, research analyst for Core Logic. "As the economy has improved, fewer people find themselves underwater."

The rest of the Bay Area gets an improved report card, too. Only 1.9 percent of homeowners were underwater in Santa Clara and neighboring San Benito counties at the end of 2015, compared with 3.6 percent the year before and 22.4 percent at the close of 2009, when 26 percent of the nation's properties were upside down.

In San Francisco and San Mateo counties, just 0.7 percent of properties were in negative equity at the close of last year, down from 1.3 percent in 2014 and 10.4 percent in 2009.

Negative equity -- colloquially described as "underwater" or "upside down" -- refers to borrowers who owe more on their mortgages than their homes are worth. In the lead-up to the recession, risky aggressive financing got more homeowners in trouble in the inland East Bay counties than in coastal stretches of the Bay Area.

Source: Mercury News, Richard Scheinin
http://www.mercurynews.com/business/ci_29627578/bay-area-real-estate-those-underwater-mortgages-are