Close to 40 percent of homeowners who took out second mortgages now owe more than their homes are worth, according to a report that will be released by real-estate firm CoreLogic Inc. on Tuesday, The Wall Street Journal reports. That is nearly double the percentage of homeowners who did not take out second mortgages.
The report shows that the overall percentage of underwater homeowners decreased slightly in the first quarter, but CoreLogic attributes that decline to completed foreclosures.
These mortgages will cause homeowners whose houses are underwater trouble getting a credit card, a car loan, or negotiating a loan modification because they have a higher likelihood of walking away from their homes.
The CoreLogic report comes a week after the S&P/Case-Shiller National Index showed that home prices declined for the third straight quarter.
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