Negative Equity Still Problem for Homeowners

New York, NY, May 25, 2012 -- How many homeowners are actually underwater?

Real-estate listing and valuation service Zillow has been revising its methodology for calculating how many homeowners owe more on their mortgage than their homes are worth.

Its first report using its revised methodology shows that nearly 16 million U.S. homeowners, or 31.4% of all homeowners with a mortgage, owed more than their homes are worth in 2012.

Zillow said that foreclosure is not imminent for most underwater homeowners, as nine out of 10 continue to make their mortgage and home loan payments on time, with only 10.1 percent more than 90 days delinquent.

However, in March, CoreLogic estimated that 11.1 million homeowners – or 22.8% of homeowners with a mortgage – were under water.

Stan Humphries, Zillow’s chief economist, says that his company’s new methodology presents a much more complete picture of the negative equity picture because it uses data from credit reporting agency Transunion rather than relying on public records.

"This is the only report that uses current outstanding loan balances on all mortgages when calculating negative equity," Zillow said on its website.