Negative equity issues persist

Roughly 46% of Florida's mortgage borrowers owed more than the value of their homes at the end of 2011's first quarter, giving the state the third-highest negative equity rate in the nation.

Only Nevada (63%) and Arizona (50%) had higher incidences of so-called “underwater” mortgages, according to a new report from CoreLogic. After Florida were Michigan (36%) and California (31%).

CoreLogic's report shows that these top five “underwater” states are facing unique challenges with home equity and borrowing, for those five states are home to roughly 40% of all underwater mortgage loans in the country. Outside of those five states, just 16% of all other mortgage loans were underwater at the end of the quarter.

The report also challenges the notion that declining home values are the cause of these equity issues; instead, the issue may be equity borrowing. CoreLogic estimates 18% of all mortgage borrowers without a home equity loan were underwater, while 38% of borrowers with an equity loan were in a negative equity situation.