Doron F. Eghbali Residential Real Estate Law Blog on Lawyers.com

Unfortunately, the hemorrhaging in home mortgages is doggedly persisting. A large number of homeowners owe mortgages worth more than their homes' value. Homeowners are seriously contemplating walking away from their homes and renting.

ONE IN FOUR HOMEOWNERS UNDERWATER IN THE US

In fact, one in four homeowners in the US owe mortgages worth more than their home's value at the end of 2009, according First American CoreLogic, a real estate information company based in Santa Ana California. In addition, the following rather gloomy facts also emerge:

• 11.3 Million Underwater: About 11.3 million homeowners had negative equity - owe mortgages worth more than the home current market value - at the end of the fourth quarter of 2009.

• 10.7 Percent Increase Compared to the Third Quarter: Underwater homeowners numbers were increased by 10.7 percent compared to the third quarter of 2009.

• 70%, 50% and 33% Underwater in Hardest Hit States : Not surprisingly, the worst numbers are in states where homes have seen the worst price declines. In fact, in Nevada nearly seven in 10 homeowners were underwater at the end of December 2009. In Arizona and Florida nearly half of borrowers were underwater at the end of December 2009. In California nearly one third of borrowers owe more than their properties are worth, at the end of 2009.

SOME OF THE REPERCUSSIONS

• Walking Away: Many people - who can even afford to pay high mortgages compared to the current value of their homes - are seriously contemplating walking away and renting a place. In fact, Experian Information Solutions, Inc, estimates that almost 580,000 home borrowers defaulted strategically in 2008.

• Delaying Economic Recovery: These numbers cast the prospect of any sustained economic recovery in doubt given the jitters homeowners have to contend with and prospective home buyers' continued expectation that the home prices will still drop further.

• Persisting Negative Equity: Even if underwater homeowners decide to stay at their undervalued but over-leveraged homes, how long does it take for such property values to return to their peaks or at least close to that? The response is as elusive as any real estate recovery.

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DORON EGHBALI is a Partner at the Beverly Hills Offices of Law Advocate Group, LLP. He Primarily Practices Business, Real Estate and Entertainment Law. He can Be Reached at: 310-651-3065. For More Information, Please, Visit: HERE.