Roughly 22.7% of all residential properties with a mortgage had negative equity at March 31, a slight improvement over yearend, when 23.1% of mortgaged homes were underwater, according to figures released Tuesday by CoreLogic.

The analytics firm said the better showing is primarily because of small improvements in the hardest-hit states — Nevada, Arizona and Florida — while a majority of states either remained unchanged or had minor increases in such loans.

CoreLogic said that underwater second liens are a growing problem. It said nearly 40% of borrowers with home equity loans are underwater and owe more than their house is worth, compared with 18% of borrowers who have no second lien.

A negative equity borrower with no second lien is upside down by an average of $52,000, versus $83,000 for a mortgagor with a home equity line of credit, CoreLogic said.

"Many borrowers in negative equity are still able and willing to make their mortgage payments," said CoreLogic chief economist Mark Fleming. "Those in negative equity and impacted by an income shock of some kind, such as a job loss, divorce or death, are much more likely to be at risk of foreclosure or a short sale."

At March 31, Nevada continued to lead the nation in negative equity, with 63% of mortgaged properties underwater. Arizona ranked second (50%), followed by Florida (46%), Michigan (36%) and California (31%).

"The existence of negative equity for the foreseeable future will weigh on the housing market recovery by holding back sale and refinance activity," Fleming said.

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